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Patients with sensorineural hearing impairment often experience difficulty in understanding speech. This can be attributed to the widened auditory filters, which results in greater spectral spread across the critical bands and thus causing increased spectral masking. Off late various methods have been used to compress the signal towards the center of the critical band. In our study we have used gammatone filters to split the speech signal into various bands and each critical band was compressed along the frequency axis. 30 hearing impaired subjects participated in a perceptual judgment and speech identification task. From the results of both the tasks we confirmed that processed speech became more intelligible, thus highlighting the need for devising a processing algorithm which can achieve the compression of signal along the frequency axis in real-time to help patients with sensorineural hearing loss to improve the perceived speech intelligibility.