Bankers on Thursday requested the Reserve Bank of India (RBI) to cut cash reserve ratio (CRR) - portion of deposits that banks keep with RBI - by 50 basis points (bps) in its upcoming annual policy review on May
3.

Chiefs of banks said that lower CRR would help them decrease lending rates, which would ease liquidity and boost investment.

S. S. Mundra, chairman & managing director of Bank of Baroda, said that had been seeking for some relief in the form of lower CRR. He added that bankers also sought a review of the increased provisioning requirements.

Speaking to journalists, Mundra said, "We think that there should be a CRR cut now, as the main issue is of liquidity. We expect the RBI to slash CRR by 50 bps."

Since January last year, the central has decreased CRR by 200 basis points.

CRR is currently at 4 per cent. It may be noted here that banks do not earn any interest on their CRR deposits with the central bank.

As per Bank of America Merrill Lynch's estimates, loan growth in the 2013-14 will slip below 13 per cent, though growth in home loans is expected to inflate banks' retail portfolio by nearly 16 per cent.