Yes Bank, a private sector bank in India, expects improvement in net interest margins (NIM) by about 0.20 per cent following reduction in Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) announced by Reserve Bank of India (RBI).
In the last two months, the Reserve Bank of India (RBI) has announced 2 percentage point reduction in the SLR, or the amount of deposits to be parked in government securities, to 23 per cent. It was followed by a 0.25 per cent cut in the CRR or the amount of deposits to be kept with RBI to 4.5 per cent.
“The SLR and CRR reductions are going to benefit most banks, including us. I do expect our NIM which is 2.8 per cent at present and which has been fairly steady over the last 6-9 quarters, will improve to a level of 3 per cent by end of FY13,” the bank’s founder, Managing Director and Chief Executive Rana Kapoor said.