The timely intervention by RBI helped suck excess liquidity from the system
RBI also encouraged overseas investors to buy stocks and bonds to the tune of another 74,800 crores
The move has ensured that the banks do not further lower their lending rates
Most important, Inflation has dropped to below 3% for the first time in 5 years !!
Former RBI Governor Dr. Bimal Jalan said at a forum once:
“ The East-Asian crisis has demonstrated the vital importance of financial institutions in sustaining the growth momentum and development. It was no longer possible for developing countries to delay the introduction of strong prudential and supervisory norms, and introduce structural reforms to make the financial system more competitive, transparent and accountable. ”