Reserve Bank of India (RBI) is likely to discuss exit from its accommodative monetary policy in its quarterly credit policy review on October 27, 2009. It is, however, expected to maintain its key rates.

Analysts say that the apex bank might raise inflation targets for the coming financial year in order to suck out excess liquidity from the banking system. Some analysts hold a view that the bank will come out with fresh regulations on securitised debt and introduce new currency derivative products. Apart from this, the central bank can announce measures related to better financial inclusion by permitting kiranawalas, shopkeepers, individual petrol pump owners, retired teachers and agents of small saving schemes and insurance companies to operate as business correspondents.

Ramya Suryanarayanan, a Singapore-based economist at DBS said "We expect the prevailing hawkish tone to be raised another notch and expect clearer signals that rate hikes are imminent". She added that the Statutory Liquidity Ratio (SLR) could be raised by 100 basis points to 25 percent in early next week. SLR is the minimum share of banks deposits that they have to maintain in liquid assets like government bonds.

Some analysts also say that there is a possibility of an increase in the Cash Reserve Ratio (CRR). Royal bank of Scotland expects a hike of 50 bps in the ratio.

India's wholesale prices increased at pace of 1.2 percent by mid-October. As a result of this many feel that RBI will take steps to bring down the demand-side inflation, which is caused by excess liquidity, since it does not have any control over supply-side inflation.

RBI might also change certain regulations on securitised debt. Bankers feel that RBI may ask the banks to hold a portion of loans into securities for a certain period of time. Siddharth Rath, senior vice president and head of capital markets group at Axis Bank said, "RBI is contemplating the move in the wake of the global financial market crisis and hopes that a minimum lock-in period would lead to greater due diligence from bankers in origination."