SLR cut pitch targets credit costs and manufacturing
Amitabh Kant urged India to reduce the 18% statutory liquidity ratio to lower credit costs and support manufacturing. OI Charts data showed short covering in ICICI Bank and marginal long build-up in Tata Steel ahead of the 27 Oct expiry.
after close1 source ↓machine-written, see hownot a recommendation
- ICICIBANK close
- ₹1,355
- On the day
- +0.44%
- Futures OI, short covering
- -1.0%
- Put-call ratio
- 0.62
- Max pain
- ₹1,340
Former NITI Aayog chief executive Amitabh Kant called for a reduction in India’s statutory liquidity ratio, saying the current 18% requirement is too high and raises the cost of credit. He said lower SLR could improve the flow of bank funding to job-intensive manufacturing, while describing production-linked incentives as a short-term measure rather than a complete long-term solution. 🏭
Key Points:
• Kant said reducing the mandatory share of deposits that banks invest in government securities could lower lending costs and release more funds for productive sectors.
• He also highlighted the financing needs of startups in new-age areas such as geospatial technology, warning that limited credit availability could prevent them from scaling into large companies.
• The comments represent a policy proposal, not an announced change in the SLR. No target level or implementation timeline was provided.
The proposal matters for banks because a lower liquidity requirement could increase the portion of deposits available for loans, particularly to manufacturing and other credit-intensive businesses. It could also shift the balance between government securities and private-sector lending. The actual effect would depend on any decision by the Reserve Bank of India, broader liquidity conditions and banks’ willingness to transmit lower funding costs to borrowers. 💼
Market data showed mixed positioning in financial and manufacturing-linked names on 09 Oct 2026. ICICI Bank closed at ₹1,355, up 0.4% on the day and 3.4% over five sessions, while its futures open interest fell 1.0%, indicating short covering. Its options data showed a put-call ratio of 0.62, with the largest call open interest at ₹1,340 and put open interest at ₹1,300. Max pain stood at ₹1,340 for the 27 Oct 2026 expiry, according to OI Charts data.
Tata Steel rose 1.1% to ₹173.80, but remained down 7.9% over 20 sessions. Its futures open interest increased 0.1%, pointing to a marginal long build-up. The largest call open interest was at ₹200 and the largest put open interest at ₹190, while max pain was ₹182.50 for the same expiry, according to OI Charts data. ⚙️
Traders will watch for any RBI or government action on the SLR, comments on credit transmission and evidence of improving bank lending to manufacturing. Until a formal decision is announced, the proposal remains a policy discussion rather than a direct change to liquidity conditions.
Source: ET Government, 11 Oct 2026
Not investment advice. For informational purposes only.