Economatrix

The Financial Crisis 2007-08 : How RBI Saved India  The financial crisis  of 2007-08 was undoubtedly the worst financial crisis since the great depression (1929-1933). It later came to be known as the subprime crisis or the mortgage crisis that emanated from the U.S financial sector. The infamous 'casino capitalism' was the root cause of the crisis. It later led to the collapse of the giants like the Merril Lynch and Lehman brothers. But due to the conservative measures undertaken by the Reserve Bank of India (RBI), combined with the effective and timely actions of the government of India, Indian economy survived. The measures  India undertook to stay out of trouble attracted worldwide appreciation and boosted the credibility of banking sector in India. RBI adopted the accommodative monetary policy at the time. It pursued a cheap monetary policy, which instilled confidence in the public, thus saved the SENSEX and NIFTY from suffering a hit. RBI took appropr...