RBI chief says there is a need to cut SLR further

MUMBAI Tue Aug 5, 2014 12:12pm IST

Reserve Bank of India (RBI) Governor Raghuram Rajan attends a seminar organised by the University of Chicago in New Delhi March 28, 2014. REUTERS/Anindito Mukherjee/Files

Reserve Bank of India (RBI) Governor Raghuram Rajan attends a seminar organised by the University of Chicago in New Delhi March 28, 2014.

Credit: Reuters/Anindito Mukherjee/Files

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MUMBAI (Reuters) - Obligations put on Indian banks need to be reduced further as they are entering a more competitive environment and the statutory liquidity ratio will have to be cut further, RBI chief Raghuram Rajan said on Tuesday.

Rajan also said interest rate tools are blunt and the central bank is trying to use other tools.

India's central bank kept its key policy repo rate unchanged on Tuesday as widely expected, but warned about inflationary risks should a shortfall in monsoon rains spark a surge in food prices.

(Reporting by Suvashree Dey Choudhury; Writing by Swati Bhat; Editing by Sunil Nair)

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