India banks body head says CRR cut to be offset by higher provisioning

Last Updated: Tue, Oct 30, 2012 09:31 hrs

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, India's central bank left interest rates on hold but cut the cash reserve ratio for banks, 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.

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