RBI's policy for rate cuts

http://www.thehindu.com/biz/2009/03/16/stories/2009031650011600.htm

The RBI had a well thought-out plan behind its twin moves — of cutting the indicative short-term interest rates and leaving CRR untouched. On the one hand, the central bank wanted banks to disburse funds to productive sectors of the economy, while on the other, it sent across a message to the market players that there was enough liquidity in the system and it would monitor the use of that liquidity.

RBI, EC and Judiciary are the best institutions of india.... they are unbiased, and are not manipulated significantly by govts (there is always a small amount of manipulation done by govts, but not much)

RBI is not dumb like US fed.... it knows what it is doing.... banks have a lot of cash... they just don't want to lend it... they have no idea of the risks in the current scenario..... but as usual dumb co-orporates always think they know better and ask for further cuts and cuts

The moral of the story is: the RBI is effectively controlling liquidity in the market and that it does not want to give an opportunity or a situation to the market players to exploit the excessive liquidity — if there at all be in the market — for speculative purposes.