Reverse repo cut a better option now
There is clear case for a cut in the reverse repo rate with most banks still averse to lending to Indian corporates, instead parking their funds with the RBI. Despite comfortable liquidity, the banks have preferred to park their funds under the reverse repo window which gives riskless 5 per cent returns. Estimates suggest that an average of Rs 29,000 crore have been parked with the RBI on a daily basis.
