Leading public sector bank Bank of Baroda (BoB) today said that liquidity in the system is likely to soften in the next 15-20 days.
"In 15-20 days, liquidity in the system will be somewhat comfortable and will ease further," BoB's Chairman and Managing Director M D Mallya told reporters on the sidelines of an event here.
Liquidity has been tight in the banking system for sometime now with banks borrowing more than Rs 1 lakh crore from the Reserve Bank of India (RBI) prompting it to announce liquidity easing measures.
The RBI in its December policy review had announced certain liquidity infusing measures by reducing the SLR by 1 per cent and an OMO buyback programme of Rs 48,000-crore of G-Secs.
"This OMO of Rs 48,000-crore will soon come back into the system and I think this will impact the lending rates. Perhaps the interest rates will become comfortable," Mallya said.
The RBI would also be doing an assessment of the inflationary situation in January and it is assumed that the liquidity in the system would then move the bond and money markets.
Also Read
On credit growth, Mallya said that growth has picked up in the past one month. He, however, did not give any guidance on credit off-take for Bank of Baroda.
However, he had earlier mentioned that BoB is expecting a credit growth of 23-24 per cent in the current fiscal and a deposit growth of 21-22 per cent during the same period.
On 2G borrowings, Mallya said that the bank has lent Rs 500-crore to some telecom companies.