The bankers on Monday put forth their demand in front of the Apex bank to slash the Cash Reserve Ratio. (CRR). Concerned about the liquidity shortage, the bankers pleaded to monitor the situation and take significant steps to counter the same. The meeting took place on Monday when the bankers met the RBI officials before the onset of mid-term review of monetary policy scheduled for next month.

The bankers have asked the Central Bank to ease the liquidity situation by relaxation in Statutory Liquidity Ratio (SLR) norms. Thus, giving an opportunity to the lenders for effective usage of the Liquidity Adjustment Facility (LAF).

A top banker said "We have asked the RBI to release more liquidity into the system as it would help banks improve their current liquidity conditions." While another banker after a pre-monetary policy meeting with the RBI governor pointed out that “We suggested a reduction in SLR on an incremental or stock basis.” The second quarter review of the monetary policy is proposed to be held on October 24. 

While a disappointed bank official said “They only listened to us. They did not indicate anything in these meetings.” The Bankers present at the meeting were State Bank of India Chairman O P Bhatt, Citibank Regional Head Sanjay Nayar, Axis Bank Chairman P J Nayak, Indian Banks’ Association Chief Executive Officer K Ramakrishnan among others. 

Elucidating on the points that affected the liquidity position, global financial crisis along with the strategies employed by the RBI to arrest inflation through series of key rate hikes was held to be the major reasons for the problem. RBI had incremented its CRR and short term repurchase rate (repo rate) to 9 per cent in July in its quarterly review to counter inflation.

K Ramakrishnan, the Chief Executive of Indian Banks' Association (IBA), said that the RBI was asked to take into consideration the global market scenario and its subsequent impact on the Indian market and only then to take any further steps in altering the Indian financial system.