Many analysts over the past week have said the RBI has legroom to cut rates to the tune of 65 bps by June and some like Barclays and BofA have also spoken about the likelihood of an inter-meeting cut.
The central bank has lowered its policy rate twice so far in 2015.
Banks may reduce their interest rates.
A Kotak research report expects RBI to cuts rates by 50 basis points in the first half of 2019. RBI will announce its sixth bi-monthly monetary policy on February 7.
Governor's statements will be weighed to gauge confidence level.
Banks normally park almost 27 per cent of their funds in government securitie.
If this turns into reality, India's gross domestic product (GDP) growth will be the lowest since 2012-13, which could severely hit job creation and income growth in the near term.
The government plans to bring down its stake to 26 per cent in these two banks, which are yet to be identified. This may not come in the way of getting investors for these banks, provided the government is willing to step back rather than run them the way it had been doing for over five decades since these banks were nationalised, points out Tamal Bandyopadhyay.
Three policymakers aware of the central bank's deliberations on the Budget said they are combing through the numbers to test how Jaitley struck a balance, and question some of the assumptions.
Equity benchmarks ended modestly higher on Friday after the Reserve Bank raised the key interest rate in an effort to cool stubbornly high inflation and defend the rupee. Continuous foreign fund inflows into the capital markets and softening crude oil prices also helped the bourses regain momentum, traders said. The 30-share BSE Sensex ended 89.13 points or 0.15 per cent higher at 58,387.93 after facing volatility during the fag-end of trade. During the day, it climbed 350.39 points or 0.60 per cent to 58,649.19. The broader NSE Nifty went up by 15.50 points or 0.09 per cent to finish at 17,397.50.
India's GDP for the three-month period ended September 30 grew 7.4%.
Reliance Industries was the top gainer in the Sensex pack, rallying nearly 4 per cent, followed by Infosys, Tech Mahindra, HCL Tech, TCS and L&T.
