Liquidity is expected to smoothen in the upcoming 15 to 20 days, says the Chairman and Managing Director of public sector lender, Bank of Baroda.
"In 15-20 days, liquidity in the system will be somewhat comfortable and will ease further," CMD MD Mallya said.
Liquidity conditions in the country have been stiff since quite some time as can be assumed from the increased borrowings of banks from Reserve Bank of India. Banks have so far borrowed Rs 1 lakh crore from RBI through the repo window thereby hinting it to mellow down in is tight liquidity measures.
The mid quarter monetary policy of the RBI in December has indicated measures towards pumping liquidity into the system by reducing SLR by 1% and also announcing open market operations (OMO) buyback venture of government securities worth Rs 48000 crore.
"This OMO of Rs 48,000-crore will soon come back into the system and I think this will impact the lending rates. Perhaps the interest rates will become comfortable," Mallya said.
Mallya also said that credit growth has taken a pick in the industry since last month.