Mumbai: The bankers had to make a choice between liquidity squeeze and an unexpectedly high credit offtake which resulted in them requesting the RBI to slash the CRR and SLR in its upcoming third quarter review of monetary policy 2010-11 on January 25, besides keeping the key policy rates unchanged. This call comes even as both RBI as well as the government are fighting high inflation, driven by a massive jump in vegetable prices since mid-December with unseasonal rain affecting crops. After the customary prepolicy meet with the central bank, Indian Banks' Association chief executive R Ramakrishnan told reporters that the bankers led by State Bank, ICICI Bank, HDFC Bank, Bank of Baroda and Union Bank of India among others, demanded reduction in both the cash reserve ratio (CRR) and the statutory liquidity ratio (SLR). They said it will help in tiding over the tight liquidity situation and poor deposit growth, as the credit offtake is growing above the industry's and RBI's own estimates. None of the bankers chose to speak to the media, after the meeting. "We requested RBI to slash both the CRR as well as the SLR (amount of prudential reserves that banks keep in the form of government securities, bonds, etc), even though we admit that inflation is a big concern. We see inflation at 7 percent by the fiscal-end. However, this is 50 basis points (BPs) above RBI's estimates for this fiscal," Ramakrishnan said. At present CRR -- the mandatory cash balance that banks park with the RBI -stands at 6 percent, while SLR stands at 24 percent. Since October, RBI temporarily brought down the SLR by 100 BPs to ease the liquidity situation and at its mid-quarter review on December 16, the apex bank brought it down to 24 percent as a permanent measure to ease the liquidity pressure in the system. From October onwards, banks have been borrowing over 1 lakh crore from RBI everyday on an average. The central bank's key policy rates of repo and reverse repo stand at 6.25 percent and 5.25 percent, respectively. AFter falling for two months, food inflation started going up since mid-December and for the week ended December 25, it jumped to 18.32 percent due to an abnormal rise in prices of food items like onions, milk and meat. Though headline inflation for November stood at 8.48 percent, given the very high food inflation and the recent 3 a litre petrol price hike, December numbers may be a tad higher than the previous month. Ramakrishanan further said, the poor deposit growth is a matter of concern for banks. Despite an increase in deposit rates, banks have been unable to attract money from the public for quite some time now, even as they have been witnessing an good spike in fund demand. "We see the credit growth touching 22-23 percent by the end of the fiscal," Ramakrishnan said.