Bankers today said that the increase in the statutory liquidity ratio (SLR) limit would not impact the liquidity in the banking system in any significant manner.
"The SLR hike will not have any large impact," ICICI Bank's Managing Director & CEO, Chanda Kochhar, told reporters here.
The Reserve Bank today upped the SLR limit by one per cent from 24 per cent to 25 per cent on the ground that liquidity has remained comfortable since mid-November 2008.
"The SLR hike will not impact liquidity...Banks have enough liquidity," State Bank of India's Chairman, O P Bhatt, said.
He expected deposit costs to be stable. "They have come down by 2-3 per cent in the last one year but whether they will decline further is difficult to say," Bhatt said.
On whether interest rates would go up, he said that it was unlikely to go up now because of the overhang of liquidity and competitive pressures in the banking system.
The SBI chief said that an upward movement in interest rates beyond March 2010 would depend on many factors such as the fiscal deficit, Government borrowings, the disinvestment process and how much the Government is able to mop up through the process and inflows through FDI, among others.
