Banking shares are trading higher on the bourses ahead of half-yearly monetary policy review by the Reserve Bank of India (RBI) today.
State Bank of India, ICICI Bank, Punjab National Bank, Bank of Baroda, Axis Bank and Bank of India are trading higher by 1-2% on the Bombay Stock Exchange as compared to 0.18% rise in benchmark Sensex. The BSE banking share index trading higher by around 1% at 1040 hours.
The RBI in its macroeconomic and monetary development review said despite high inflation it would take steps to support growth in the half- yearly review of monetary policy.
It is widely expected that RBI will reduce the cash reserve ratio—the percentage of deposits that banks are expected to maintain with RBI—by 25 basis points releasing over Rs 16,000 crore.
In its last policy review, RBI held interest unchanged, though it had lowered CRR by 0.25% to infuse Rs 17,000 crore liquidity into the system. The Central bank has held the policy rate or the repo rate at 8% since April 2012.