SBI Chief says liquidity situation good in short term

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New Delhi, Nov 16 (UNI) Expressing satisfaction over the measures taken by the Reserve Bank of India (RBI) to ease the tight financial situation in the country, State Bank of India Chairman O P Bhatt today said liquidity situation is good in the short term.

''Due to the global slowdown, the growth has moderated and to kick start the economy, the RBI has taken enough the short term, India's situation is good, in medium and long term, it is a different issue altogther,'' Mr Bhatt told mediapersons here.

The RBI had yesterday announced a slew of measures to propel the economy which include more deposit rates for non-resident Indians (NRIs) to arrest decline in forex reserves.

The apex bank had also allowed the registered housing finance companies to raise short-term funds from overseas markets to ensure more liquidity for the real estate sector.

Regarding this, Mr Bhatt said, ''The real estate sector needed these reforms as many projects are pending half way due to the liquidity crisis.'' Besides, he said there is significant headroom for further cut in interest rates as inflation rate eased to single digit of 8.98 per cent. ''But, we cannot say when and how soon the rates will be slashed,'' he added.

The country's largest lender has slashed its prime lending rate (PLR) by 75 basis points to 13 per cent with effect from November 10 and will reduce the deposits rate by 50 bps with effect from December 1.


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