"Widespread Crisis" - RBI hints at further steps.

RBI hints at more steps to tackle a 'widespread' crisis

Mumbai (PTI): Signalling more monetary steps to bring back fiscal discipline, the Reserve Bank of India on Wednesday said the financial crisis has become more "widespread" in the domestic economy despite the international markets showing sign of improvements.

"The ongoing financial crisis has had a deep impact on the existing framework for measuring, assessing and maintaining financial stability...with the crisis extending to new areas and instruments, it has become extremely difficult to gauge its magnitude and implications," RBI said in its Trend and Progress report.

The apex bank cut cash reserve ratio, short-term lending and borrowing rates in several tranches in the recent past to 5.5 per cent, 6.5 per cent and 5 per cent, respectively, infusing above Rs 3 lakh crore liquidity to regain confidence in the financial system.

Besides, it also opened up new borrowing channels for banks to extend sufficient credit to needy segments. This was supported by several other measures from the government which slashed tax rates across the board to prop up demand.

However, the overall long-term macro economic outlook of the country continues to be favourable with moderation of growth being the current policy concern, the RBI said