In a bid to deal with the liquidity crunch, the Reserve Bank will take some action by this month end after consultations with the Indian Banks' Association.

After a meeting with chairmen of public sector banks, Finance Minister P Chidamabram told reporters that a sub-committee of five members of IBA has been formed and it would meet RBI Governor Y V Reddy early next week to tackle the shortage of money availability in the system.

"A committee of five (bank) chairmen representing IBA will meet the (RBI) governor early next week -- Monday or Tuesday. We expect that RBI will take some action relating to the issue of liqudity by March 31," he said.

The government and RBI would also come out with ways to implement the budgetary provision of giving concessional short-term crop loan at 7 percent to farmers by this month end, well in time for the kharif season, he said.

The members of the IBA committee comprises SBI [Get Quote] Chairman A K Purwar, Citibank CEO Sanjay Nayar, ICICI [Get Quote] MD and CEO K V Kamath, IDBI CMD V P Shetty and Bank of Baroda [Get Quote] CMD A K Khandelwal, association's Chief Executive H N Sinor said.

He said bankers suggested to the finance minister that RBI could cut cash reserve ratio, use excess statutory liquidity ratio and market stabilisation scheme to soften liquidity in the system.

Rates for non-resident deposits should also be made attractive to draw NRI funds in the system, he added.