Though interest rates have peaked, a hike in cash reserve ratio by the Reserve Bank of India [Get Quote] cannot be ruled out in the first quarterly review of monetary policy later this month, a top official of a foreign bank said on Monday.

"Inflation concerns have been mitigated and we are at peak with interest rates. However, the desire to mop up liquidity remains and a CRR hike cannot be ruled out," ABN Amro Country Executive (India) Romesh Sobti told reporters in Mumbai.

Inflation stood at its 14-month low of 4.03 per cent for the week ended June 16, down from 4.28 per cent during the previous week. RBI targets to control inflation below 5 per cent this year and 4-4.5 per cent in the medium term.

ABN Amro also announced its results for 2006-07. The net profit of the bank for the fiscal was up 59.44 per cent to Rs 385.35 crore (Rs 3.85 billion) with robust growth in deposits.

The growth has been due to the right balance of strong growth, capital utilisation and offering customer value, Sobti said. The deposits rose by 34.85 per cent to Rs 15,998.30 crore (Rs 159.98 billion) while the advances increased by 21.99 per cent to Rs 18,387.55 crore (Rs 183.87 billion).

"The key is liquidity and thus our robust growth in deposits. However, the deposit rates have peaked and we expect a downturn," he added.

On slow retail growth, Sobti said the bank has become more selective to maintain credit quality. "We have to balance the EMIs to income capacity of people so that there are no delinquency. We are safeguarding our books," he said.