Banking sources in Kolkata said that the main expectation from the slack season credit policy was that the apex bank might take a cue from the budget in freeing the caps on SLR and CRR, which the banks have to mandatorily maintain as a percentage of net demand and time liabilities.
The sources said "freeing of caps is going to have a big impact on the banking system of the country as it would release surplus funds into the system."
Besides, increasing liquidity in the system, banks would get a better spread if the caps on SLR were freed as they would have the liberty to increase advances to the corporate rather than purchasing government securities, gold and other approved papers.
However, they warned that everything would depend whether the system would be able to absorb the excess liquidity and how individual banks deployed the credit as advances.
At the moment, banks were required to maintain 25 per cent to 40 per cent of NDTL as SLR and five per cent as CRR.
