Incentive for banks to cut rates due to better liquidity in April - RBI chief

MUMBAI (Reuters) - There is an incentive for Indian banks to lower rates in April as a high amount of liquidity would be released into the banking system, RBI chief Raghuram Rajan said on Tuesday.

India's central bank kept interest rates on hold at 7.50 percent on Tuesday, waiting for more clarity on inflation after heavy rains raised uncertainty about food prices and seeking to grant banks more time to reflect its previous rate cuts.

Rajan also said he doubts that the U.S. Federal Reserve's policy will be constraining when the RBI moves again and though the Fed changes will create some volatility, they will not be central to India.

(Reporting by Suvashree Dey Choudhury; Writing by Swati Bhat; Editing by Prateek Chatterjee)