Das has no more tricks up his sleeve in war for deposits save art of persuasion

livemint.com:

₹2-3 crore (are) where high single digit rates can be offered for long-term deposits." The interest rate deregulation means the RBI cannot direct banks to make deposits more attractive. However, a senior economist suggested that the RBI can look at tweaking system liquidity, which would have an impact.

“To assuage liquidity, a permanent infusion of funds through a CRR (cash reserve ratio) cut or OMO (open market operations) could infuse a large amount into the system which can then be used by banks for lending purposes while keeping in mind the caveats the RBI has been talking about in terms of over-extension of credit," said Madan Sabnavis, chief economist at Bank of Baroda. At 4.5% of deposits currently, CRR is the amount of money banks need to park with the RBI at zero interest as a buffer in emergencies.

OMO is used to manage liquidity conditions. According to Karan Gupta, director and head of financial institutions at India Ratings & Research, there is a shift in the profile of people’s savings from deposits to financial investments such as mutual funds, investment products and insurance.

The RBI, Gupta said, already has measures such as CD ratio and LCR (liquidity coverage ratio) that it monitors to keep things in check. “If deposit growth continues to lag advances growth, more nudges can be expected from the RBI before it actually takes any regulatory action."