LIVE RBI policy review: In one of the most anticipated monetary policy reviews in recent months, Governor Raghuram Rajan announced a 25 bps repo rate cut today to 6.5 pct - a 5-year low. "Rate is enough considering the uncertainties prevailing in India," says Raghuram Rajan. Reacting to the Panama Papers revelations by The Indian Express newspaper on Monday, Guv Rajan said, "We are in the investigation team on Panama papers to see what is legitimate and what is not". RBI retains economic growth forecast at 7.6 per cent for 2016-17. RBI sees 7th Pay Commission impact on inflation at 100-150 bps over the next two years; expects FY17 CPI at around 5 per cent. RBI has reduced minimum daily maintenance of CRR from 95 per cent to 90 per cent effective April 16, but leaves the CRR unchanged at 4 pct. But in a surprise move, the Reserve Bank of India also raised the reverse repo - or the rates lenders charge to the central bank - by 25 basis points to 6.0 percent, while taking measures to ensure more availability of cash in the banking system. If banks pass on the benefits of repo rate cut to loan takers, EMIs will fall and new loans will turn cheaper. RBI says it will remain accommodative in its policy stance going forward. RBI hints at licensing other differentiated banks, like custodian banks, those concentrating on wholesale and long-term financing. RBI has also slashed marginal standing facility by 0.75%; hikes reverse repo rate by 0.25% to ensure better alignment of call rates with repo rate. Sensex was down 131 pts just ahead of announcement (Express Photo)

RBI policy review: Governor Raghuram Rajan cut repo rate by 25 basis points to 6.50 percent and here are the reactions to the move by experts. * SHUBHADA RAO, CHIEF ECONOMIST, YES BANK, MUMBAI: "The policy sounds dovish. Greater focus is on liquidity management, more importantly the commentary is clearly guiding on further rate cuts, with four riders, namely: good monsoon, low headline CPI, softening core CPI and improving rate transmission. On these four parameters further rate cuts would play out." * RADHIKA RAO, ECONOMIST, DBS BANK, SINGAPORE: "In all, today's decision was more focused on addressing liquidity shortage and easing the transmission mechanism. There is a significant shift in their emphasis on the NDTL framework, narrowing the corridor around the operational repo rate and CRR changes. This is to ensure that the easy policy stance percolates to the real economy and materially lowers financing costs. These changes are likely to provide positive impetus to the financial markets in the near-term." * RAJEEV TALWAR, CHIEF EXECUTIVE OFFICER, DLF LTD, NEW DELHI: "The repo rate cut is a good one if it is passed on by the banks and bank rates come down. The governor has been very conservative. The government has been much more proactive by easing FDI rules and taking other measures. The economy is on a recovery path despite the RBI. This round goes to the finance minister." (Express Photo)

RBI policy review - COMMENTARY: * MAHANTESH SABARAD, SBI CAP SECURITIES LTD, MUMBAI: "Whether we will have future rate cuts or not depends on what kind of stance the RBI Governor is taking. We expect there could be further rate cuts ahead. One of the important data points that the governor had to work with is that there is a normal monsoon forecast ... which is the first preliminary forecast. Therefore it tells me that there could be another rate cut by 25 basis points sometime during May-July". * SAUGATA BHATTACHARYA, SENIOR ECONOMIST, AXIS BANK, MUMBAI: "Policy remains accommodative. Over the next two months, if rainfall conditions remain better and with an eye out on global economic conditions, they still have room for another 25 bps rate cut. On the rate corridor move, I think they are moving towards Phase II of the liquidity managment framework, keeping overnight rates closer to policy rates. They're managing short-term rates well while keeping durable liquidity supply stable." * ARVIND CHARI, HEAD OF FIXED INCOME AND ALTERNATIVES AT QUANTUM ADVISORS, MUMBAI: "Its move to bring system liquidity to neutral along with the narrowing of the corridor to 50 bps and CRR maintenance at 90 percent will allow overnight rates to remain very close to the repo rate or even drift marginally lower. We expect proactive OMOs to get the 'core' liquidity back to zero. Market seems to have though as of now ignored the projected increase in inflation by RBI and its rhetoric on impact of sixth pay recommendation. Although the door for another cut is open, but the bar is high now." * A. PRASANNA, ECONOMIST, ICICI SECURITIES PRIMARY DEALERSHIP LTD, MUMBAI: "The rate action was in line with our expectations. The narrowing of the LAF corridor is understandable however it may cause some uncertainty about stability of the corridor. The change in liquidity stance is surprising given the uncertainty surrounding the external profile and the buildup of forex assets. It remains to be seen whether RBI will be successful in achieving neutral liquidity balance." (Express Photo)

9. Raghuram Rajan speech: "The Centre and states have been creating a platform for strong and sustainable growth, and I am confident the payoffs are on their way, but until we have stayed on this path for some time, I remain cautious." (Express Photo)

1. RBI policy review: Not just the common man, Bankers and experts too are expecting a repo rate cut which will herald lower borrowing costs as the inflation trajectory is down and the government has pledged to stay on the fiscal consolidation path. FM Arun Jaitley said: "The government has stuck to fiscal deficit commitments and inflation has been under control. I do hope that this movement will continue in order to make our economy more competitive with more competitive interest rates." (Express Photo)

2. RBI policy review: Keen to show that it means business, the government has pared the small savings schemes (SSS) interest rate by up to 1.3 per cent, providing cushion to the Reserve Bank of India (RBI) for lowering the policy rate and for banks to pass on its benefits to consumers – banks have been extremely reluctant to cut the interest rates at which they offer loans citing high SSS interest rates. In all, the RBI reduced by repo rate by 125 bps in 2015, but it has been frustrated by commercial banks failure to pass on the full benefits to the wider economy. Complaining of tight liquidity in the financial system, banks only passed on about half of the RBI's rate reductions to borrowers so far. (Express Photo)

3. RBI policy review: Expectations have been built so high that, according to a senior official from a state-owned bank, although a 0.25 per cent rate cut has been factored in by the market, there is also a high possibility of RBI policy review actually unveiling a repo rate cut by as much as 0.50 per cent. Not surprisingly, industry chambers on their part are pitching for 0.50 per cent cut in the key interest rate. "A 0.25 per cent cut in the policy rate is almost given, but the real impact of falling lending cost can be felt only if the central bank goes in for a bold reduction of at least 0.50 per cent," industry body Assocham said. (Express Photo)

4. RBI policy review: Retail inflation as measured by the consumer price index eased to 5.18 per cent in February as food prices rose at a slower pace while the wholesale price index stayed in the negative territory for the 16th month in a row. (Express Photo)

5. RBI policy review: RBI Governor Raghuram Rajan had last month said the government sticking to the fiscal consolidation road map in Budget was comforting, a statement which raised hopes for a rate cut in April 5 monetary policy. RBI, in 2015, had lowered interest rates by 1.25 per cent. More positively, a business survey released on Monday showed Indian manufacturing activity expanded for the third straight month in March and at the fastest pace since July, driven by stronger demand which allowed companies to raise prices at the fastest pace in 16 months. The latest Nikkei/Markit Manufacturing Purchasing Managers' Index showed the new orders sub-index, a proxy for domestic demand, also rose to an eight-month high, encouraging firms to increase output. Foreign demand also rose though at a slightly more moderate pace. (Express Photo)