Mumbai, Feb. 28: The banking sector walked away with most of the goodies from the 2005-06 Union Budget as finance minister P. Chidambaram announced path-breaking initiatives, including amendments to the Banking Regulation Act, 1949.

The finance minister also allowed them to raise money by issuing preference shares.

He has done away with lower and upper limits on the statutory liquidity ratio (SLR) and cash reserve ratio (CRR) to allow more leeway in the monetary policy by the Reserve Bank of India (RBI).

Banking analysts said the impact of these measures could be two-fold. While it would give more freedom to the central bank to act on these monetary instruments, the removal of the floor would also release crucial resources, which could be used for lending.

Under the present regulations, CRR, which is a portion of deposits to be maintained by banks with the RBI, cannot come below a level of 3 per cent. Similarly, there is a lower limit of 25 per cent with regard to SLR.