The Reserve Bank of India (RBI) will meet the chiefs of major banks on 7th July, following the announcement of union budget.

The meeting will also include D Subbarao, Governor of RBI and three Deputy Governors.

The discussions in the meeting are will revolve around credit demands, credit policies, low credit offtake and interest rate scenario. It is expected that the budget propositions may also be discussed.

Quoting a top official of a PSB, in relation these issues, "Given the ample liquidity in the system and low credit off take, it's improbable that bankers would ask a cut in key interest rates."

Mr. D Subbarao told, "There were signals of demand resurgence in sectors such as steel, cement and coal."

Since last September, the primary liquidity in the system has mounted to Rs 4,22,793 crore, after the central bank reduced repo rate and reverse repo rate by 400 basis points and 250 basis points respectively. The bank also reduced CRR was also cut by 400 basis points.

With soaring liquidity and low credit off takes, banks have been parking their excess funds in reverse repo window with RBI. The SLR ratios maintained by the banks have been above the mandatory value. Industry has urged the bankers to reduce lending rates with specific reference to exporters.

Presently, the main emphasis of the central bank is demand revival. In a recent statement, RBI governor, D Subbarao indicated demand revival in sectors such as steel, cement and coal.