The Reserve Bank of India (RBI) reviews monetary policy on Tuesday and a Reuters poll showed it might hold rates steady after recent aggressive reductions but a sizeable minority of analysts bet on yet another cut.

"There might be a scope for reducing both the repo and the reverse repo. Unless they reduce the reverse repo it will be difficult. The reverse repo acts as a problem as banks park funds with the RBI," Suresh Tendulkar, chairman of the prime minister's Economic Advisory Council said on phone.

"So I think they will have to reduce both."

Asked whether the RBI will cut rates in its policy on Jan. 27, Tendulkar said: "Well, I think given their previous behavior RBI has always been cautious. Consequently, I will not be surprised if they don't cut."

"But certainly they will give some indicative perceptions on Tuesday."

The repo rate, the key short-term lending of the RBI, stands at 5.5 per cent after being slashed by 350 basis points since mid-October.

The reverse repo rate is at which the central borrows short-term funds from banks. It stands at 4 per cent.

Tendulkar, who will release an update of the economy later in the day, said bank lending has to speed up and lending rates must come down.