The cut in cash reserve ratio (CRR) and statutory liquidity ratio (SLR) by the RBI is seen by experts as a positive move while financial entities Goldman Sachs and Citigroup Global stated that more needs to be done. The reserve bank of India, on Saturday, cut mandatory cash deposits, banks need to keep with the RBI by 100 basis points (bps) and the short term lending rate by 50 basis points.

The Citigroup Global markets report stated, "Globally things have been improving, risk appetite may take a while to normalize and thus one could expect continued RBI intervention.This, coupled with not-so encouraging sales over festive period and the near halving of non-bank funds, makes the likelihood of further CRR/SLR/repo rate cuts inevitable".

The Vice President -Asia Economics Research at Goldman Sachs, Tushar Poddar commented on the cuts stating "This shows that the RBI  is reacting to pressures in money markets rather than pre-empting them......We now expect the repo rate to be cut by an additional 200-250 bps by mid 2009, which we think will be the trough of activity, with most of the rate cutting front-loaded as inflation continues to fall sharply".

With regard to liquidity, Rohini Malkani, Economist at Citi India spoke about, "The possibility of accessing temporary dollar liquidity support from international institution to boost dollar liquidity" as well as easing capital norms further.

Tushar Poddar further said "We expect the banks to gradually lower, first the deposits and then the lending rates only by 50-100 bps, not least due to moral suasion and pressure from the RBI and Government, particularly on public sector banks.......The rate cut will eventually lead to a softer interest rate environment and it will help mitigate the slowdown in credit due to high risk and thereby growth".