Both the government and the Reserve Bank of India responded to the challenge in close coordination and consultation. The main plank of the government response was fiscal stimulus while the Reserve Bank's action comprised monetary accommodation and counter cyclical regulatory measures.
Monetary policy response The Reserve Bank's policy response was aimed at containing the contagion from the outside – to keep the domestic money and credit markets functioning normally and see that the  BIS Review 39/2009  3  liquidity stress did not trigger solvency cascades.