Fourth bi-monthly policy announcement from RBI is a balanced statement from the economic perspective and futuristic on various operational aspects of the banking sector. As expected the repo rate is kept unchanged owing to concern about risks to its target to bring CPI to 6.0 per cent by January, 2016. On the basis of the various economic indicators, RBI has maintained its GDP projection to 5.5 per cent which was the same in the last policy statement also. Interestingly, reasons for the low credit pick up is dealt in detail in the statement. Considering the fact the credit has not picked up much and system is having sufficient liquidity and corporates are having various avenues for raising funds and investment climate is yet to turn around, going forward, banks may reduce the deposit rate as has been done by some large banks. From the operational aspects, some of the measures like hiking the government securities held by banks to qualify for High Quality Liquid Assets (HQLA) by another five per cent, staggered cuts in HTM requirements over a period of time are driven by RBI’s goals to have banks meet their Basel-III liquidity norms. These are enabling measures to help banks to comply with the requirements under Basel III. Permission given to Scheduled Urban Co-operative Banks to have access to the LAF to meet their liquidity requirements was one of the issues represented by IBA to the regulator. It has been a long standing demand from that segment and is addressed today. Like the previous two bi-monthly statements, RBI is also focusing on deepening the market and liberalised policy on short sale and re-repo of Government Securities are towards that direction. However, short sale in Government Securities depends on the market dynamics and could be considered as an enabler for future requirements. Move on simplified KYC is a positive for the customers and banks as well. It will reduce a lot of administrative hassles for the banks and will facilitate easy compliance.