Joining the group of major Indian bankers who are appealing for a further cut in cash reserve ratios (CRR) from the central bank, Mr. T. R. Chawla, the Executive director of Allahabad Bank has also made a similar plea to the Reserve Bank of India.

Mr. Chawla is pitching for a reduction in CRR so that the slow credit growth in the economy can pick up pace. It is to be noted that RBI will be reviewing the key policy rates for its second quarter monetary policy on October 30, 2012.

Cash reserve ratio refers to the certain quantity of funds which the banks are required to maintain with the reserve bank.

Citing a reason for supporting a rate cut in CRR, he said that as inflation was still a concern, a reduction in rates will accelerate credit growth. He also said that he was hopeful that RBI will be considering changes in policy rates.

It is reported that the growth in the retail loans segment in low, not only for Allahabad Bank, but for the entire banking industry. Bankers feel that a decrease in CRR would help them to provide credit at lower rates, which will be beneficial to the customer and thus increase credit growth.