Market welcomes RBI's CRR cut but wants more

India's banking sector echoed similar views.

"The reduction in the CRR is a welcome step given the current rupee liquidity conditions," said Chanda Kochhar, joint managing director and CFO, ICICI Bank. "This should have a cooling effect on the market and ease liquidity."

The RBI's decision will not only ease the credit crunch but will also soften the interest rates by unlocking Rs.60,000 crore of bank funds, said Allen Pereira, chairman and managing director, Bank of Maharashtra.

T.S. Narayanasami, chairman and managing director, Bank of India, feels that RBI needs to do more. "It (the CRR cut) is not enough. More and more doses need to come," he said.

Economists and market analysts feel the same way.

"This is a short-term reaction to a huge panic crisis and a possibility of a run in the rupee. I think they will try their best to prevent the rupee from breaching 50 per dollar," said Abheek Barua, chief economist at HDFC Bank.