MUMBAI (Reuters) - The impact of Tuesday's cut in the cash reserve ratio will be offset by higher provisioning for Indian banks, the head of industry body Indian Bank's Association (IBA) said.
Earlier on Tuesday, the RBI left interest rates on hold but cut the cash reserve ratio for banks (click http://in.reuters.com/article/2012/10/30/rbi-repo-rate-crr-policy-review-idINDEE89T03320121030 for main story), defying pressure from the government to lower rates for the first time since April.
IBA head K.R. Kamath, who is also the chairman of state-run lender Punjab National Bank , said higher provisioning is likely to impact average net profit of banks by 3 percent in this fiscal year.
(Reporting by Swati Pandey and Neha Dasgupta; Editing by Prateek Chatterjee)