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'Growth, liquidity and deposit mobilisation are likely to be discussed during the interaction.'
Sanjay Malhotra, who took charge as the governor of the Reserve Bank of India in December, will have his first interaction with the managing directors and CEOs of public sector banks and private lenders on Thursday, January 16, ahead of the February monetary policy review.
The interaction is part of pre-monetary policy consultations.
The six-member rate-setting panel will review the policy during February 5 and 7.
The RBI governor, along with the top brass of the central bank, will meet PSB CEOs in the morning and then private bank chiefs during post lunch, three sources told Business Standard.
The February policy is important on the backdrop of slowing economic growth amid elevated inflation.
India's gross domestic product (GDP) growth slowed down to a two-year low of 5.4 per cent during July-September.
Consumer price-index (CPI)-based inflation, on the other hand, was 5.48 per cent in November.
December's inflation, which will be announced this week, is also expected to stay above 5 per cent.
The central bank has kept the policy repo rate unchanged for the longest spell. After increasing the rate by 250 basis points (bps) between May 2022 and February 2023, the RBI has kept it unchanged at 6.5 per cent.
The stance of the policy, however, was changed to neutral in the October policy review meeting.
A section of market participants expect the central bank to start the rate-cutting cycle from the February policy.
"Growth, liquidity and deposit mobilisation are some issues that are likely to be discussed during the interaction," said the CEO of a commercial bank.
Loan growth in the banking system has slowed considerably in the last few months with liquidity conditions tightening.
Credit growth of scheduled commercial banks moderated to 11.4 per cent in the fortnight ended December 27, from 20.2 per cent during the previous financial year.
Deposit growth, which was lagging loan growth in the early part of the financial year, has now converged.
Liquidity in the banking system has tightened to touch Rs 2 trillion and this could further slow loan off-take.
Data showed that RBI infused Rs 2 trillion in banks on Thursday.
One of the reasons for the tight liquidity is the central bank's intervention in the foreign exchange market by selling dollars as the rupee came under pressure.
On Friday, the rupee fell to a new low of 85.97 against the US dollar.
The Indian currency fell nearly 3 per cent against the greenback in 2024.
This comes after a stable 2023, during which it had weakened only 0.6 per cent.
There is a clamour for further reduction in the bank's cash reserve ratio (CRR) requirements.
RBI had reduced CRR by 50 bps to 4 per cent in the December policy review, which released primary liquidity of Rs 1.16 trillion.
"The other area that may be discussed is customer service-related issues," the person added.
Malhotra had emphasised on customer centricity in his new-year message to the employees of RBI.
'Let us keep customer centricity at the heart of our endeavours and work towards providing seamless and user-friendly services,' Malhotra wrote to his colleagues on new year eve.
Feature Presentation: Aslam Hunani/Rediff.com
