DBS bank on Wednesday reported that the Indian central Bank has decided to raise key interest rates and the cash reserve ratio (CRR) requirements for banks by 25 basis points by the end of June, before July 27, the scheduled date for the meet.

As a result of this decision, the Reserve Bank of India (RBI) on Tuesday raised its key interest rates and the CRR by 25 basis points, in anticipation to curtail the rising inflation, without hampering the growth rates.

DBS also said that from now onwards, central bank will be deciding the rates by means of inter- meetings.

DBS further added that RBI's growth forecast raise warning signals over inflation.

The RBI has anticipated GDP growth in 2010-11, at 8 percent with a positive aspect and expected inflation at 5.5 percent by end of March 2011.

DBS said that the RBI's end period inflation forecast implies an inflation rate to be 7.8 percent in 2010-2011 which is higher than the market forecast and DBS forecast of 6.5 percent.

It said that examining end period inflation does not reflect the accurate rate of inflation and demanded for clarity and explanation from RBI regarding such forecast.

It said, however authorities are looking forward for inflation rate to rise much higher than 5 percent in the medium term.

At present repo rate at which RBI lends to banks is 5.75 percent which is expected to climb to 6.25 percent.

Reuters have conducted a poll in which it was found that few analysts anticipate that Indian central bank will raise its interest rate again before its next quarterly review.

On Wednesday, the central bank declares that it will maintain CRR INCRR=ECI as its monetary policy tool.