New Delhi: An ordinance, which seeks to empower the Reserve Bank of India (RBI) to cut the statutory liquidity ratio (SLR) to below 25 per cent, is expected to be brought in by this month-end or early February.

The Reserve Bank is slated to come out with its quarterly monetary and credit review on January 31.

Under the present requirements of SLR, banks have to keep 25 per cent of their total deposits in the form of liquid assets comprising cash, gold and approved securities, mostly government bonds.

Last week, the cabinet cleared the ordinance to cut the floor limit of SLR. The decision to bring an ordinance to amend Banking Regulation Act, 1949, would provide RBI more operational flexibility in the conduct of monetary policy.

Sources said an ordinance could only be promulgated before the president summons the Parliament, which is generally 21 days before the session.

If the session begins on February 23, as is expected, then the President is expected to summon the houses by February 2 in which case the ordinance cannot be issued after February 1.