The requirement of certificates of deposits (CDs) and term deposits (TDs) for banks will come down while their rates could see downward pressure in the wake of the Reserve Bank of India providing long-term funding at a fixed rate (current average rate 5.15 per cent) along with the relaxation in cash reserve ratio (CRR) for incremental loan book growth in certain segments, according to India Ratings (Ind-Ra).
The recent measures announced by the RBI – provision of long-term funding via the long-term repo operation (LTRO) facility and limited CRR relaxation to encourage credit flow to the MSME (micro, small and medium enterprises) and consumer segments (auto and housing) – will encourage banks to extend credit to the retail and MSME segments, the credit rating agency said.
This story is from the March 05, 2020 edition of The Hindu Business Line.
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This story is from the March 05, 2020 edition of The Hindu Business Line.
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