The move was expected to prompt commercial banks to trim their primelendingrate, which would reduce the benchmark rate for millions of consumer and business loans to 7.25 percent.
While bankers said that the CRR hike is unlikely to impact banks' prime-lending rate, the Reserve Bank of India has revised its forecast of bank credit growth downwards from 18% to 16%.
The attractive margins on commercial lending (a gaping three-point spread between the primerate and the Federal Reserve discount rate) don't alter this gloomy picture.