Mumbai, Oct 4: To induce liquidity into the system, the RBI reduced the Statutory Liquidity Ratio (SLR) -- a reserve requirement that commercial banks must maintain -- by 50 basis points to 19.5 per cent from October 15. Further, RBI lowered the country's growth projection for 2017-18, pegging the Gross Value Added (GVA) at 6.7 per cent. The central bank had earlier estimated India's GVA in 2017-18 to grow at 7.3 per cent. Taking into account various factors during the fiscal, the RBI said: "The projection of real GVA growth for 2017-18 has been revised down to 6.7 per cent from the August 2017 projection of 7.3 per cent, with risks evenly balanced." The equity markets, which had already discounted any further reduction in key lending rates, made substantial gains as RBI reduced the SLR which created healthy demand for the banking stocks. The key indices also rose on the back of positive global cues and value buying.
Rising inflationary pressure and concerns over "fiscal slippage" prompted India's central bank, the RBI, on Wednesday to maintain its key lending rates. News24Bureau with Agencies