The Reserve Bank of India (RBI) will likely cut cash reserve ratio (CRR) by 25 basis points (bps), according to a poll of 21 market participants.

Indranil Sen Gupta, an economist with Bank of America Merrill Lynch, said the RBI could announce a cut of 25-50 bps in CRR as the central bank's Liquidity Adjustment Facility window returned to more than Rs 1 lakh crore levels.

Analysts at Icra Ratings said, "In light of the seasonal pick-up in credit demand, the cental bank may consider a further reduction in the cash reserve ratio by 25-50 bps to support economic activity."

CRR is the share of deposits that banks must keep with the RBI, while Repo rate can be described as the rate at which banks borrow money from the central bank. Liquidity Adjustment Facility is a mechanism to meet banks' short-term cash shortage.

Seventy per cent of analysts polled by Business Standard expect the central bank to announce a cut of 25 bps in the CRR. Currently, CRR is at 4.5 per cent. The central bank had slashed CRR by 25 bps in its mid-quarter monetary policy review in September.

Economists at Nomura also expressed hope that the RBI could cut CRR by 25 bps to give a positive response to the government's recently announced economic reforms.

However, analysts do not expect the central bank to ease the repo rate or policy rate, which is currently 8 per cent. An economist with a private banking giant said that only political pressure could lead to the central bank easing policy rates at this crucial juncture.

The RBI will announce its monetary policy review on 30th of October, 2012.