The busy season Credit Policy will be unveiled on Tuesday amidst expectations that the Reserve Bank of India [Get Quote] will keep key interest rates unchanged to foster higher economic growth and ensure moderate inflation.

Bankers expect no change in RBI's benchmark Bank Rate, Repo Rate or Reverse Repo Rate as there is excess liquidity to the tune of Rs 68,000 crore (Rs 680 billion) on account of the market stabilisation scheme (MSS) and another Rs 15,000 crore (Rs 150 billion) in terms of Liquidity Adjustment Facility.

Referring to the Rs 58,000 crore (Rs 580 billion) market borrowing for the next few months, bankers said there may not be hike in rates as it may raise the cost of funds for government.

It will be interesting to see what measures RBI proposes to enable banks mop up Rs 60,000 crore (Rs 600 billion) additional capital in 5-6 years to sustain their business growth and conform to the stringent Basel-II norms coming into effect from 2007.

"My main expectation (from the policy) is on the front of bank rate and CRR. I don't think, looking into the liquidity available, that the RBI will tinker with the bank rate or reverse repo rate. Even CRR would be maintained at the present level of 5 per cent," PNB chairman S C Gupta said.

However, rates can rise by 25-50 basis point in certain segments if credit demand rises in coming months, he said.

Uco Bank [Get Quote] chairman V Sridar said: "There is no compelling reason for RBI to hike rates as there is adequate liquidity. If any change is contemplated, it could happen in December."

Since the government has to raise Rs 58,000 crore from the market in the next five months, RBI would like to keep the cost of raising the funds lower, he said.