Indian companies felt marginally relieved on Monday after the Reserve Bank of India cut the cash reserve ratio by 50 basis points as most of them expected only short-term tightness to ease a bit.

Several firms, which were facing problems in meeting even their working capital requirements, expected banks to loosen their purse strings for lending. "Today we are seeing a lot of credit constraints in the market even for working capital. In this scenario, any step by RBI is welcome," said Seshagiri Rao, director-finance, JSW Steel [Get Quote].

State-run oil refiners, which were finding it hard to fund their crude purchases, expected some of the tightening to ease.

"We are delighted as this will improve liquidity at a time when we are finding it difficult to borrow money," said S V Narasimhan, director-finance, Indian Oil Corporation [Get Quote].

The real estate sector, which is grappling with a climbing inventory of unsold stock and shortage of funds because of the ongoing tightness in the market, also expected some relief.

"With this cut, I believe more support will come to the real estate sector and help us execute projects faster," Pradeep Jain, chairman, Parsvnath Developers [Get Quote], said.

The consumer durables industry, which was facing slowing sales and narrowing margin, expected the move to ease financing for its distributors and other trading partners.

"It will help in increasing availability of funds, which will make borrowing for our trade partners easier," said V Ramchandran, director (marketing and sales), LG Electronics India.

A section of CFOs of the consumer durables industry expected cost of funds to ease. "Lowering CRR will help ease the market situation. We also expect a reduction in interest cost," said B K Gupta of Videocon Industries [Get Quote].

Some financial companies saw the central bank's move as a step to avoid a systemic risk as banks were borrowing short-term money at unrealistically-high interest rates to meet funding requirements, which could trigger defaults. Banks had borrowed Rs 91,000 crore from RBI, according to Gagan Banga, CEO, Indiabulls Financial Services [Get Quote].

"The cut is enough to avoid any systemic risk. Banks are sitting on a possible volcano and the RBI move will help reduce that possibility," said Banga.

Still, many felt that the move was insufficient and demanded more measures from the central bank.

"We need a series of actions. Especially, loan availability has to improve. We have a long way to go," said S Sridhar, CEO, two-wheelers, Bajaj Auto [Get Quote].

Pradeep Jain, chairman, Parsvnath Developers, said he was expecting at least a 100-bps cut in CRR as it was increased by 900 basis points in the last 12 months. "More liquidity is required when there are concerns about global markets," he said.

Overall, company executives expected the central bank to announce additional relaxations in the credit policy to be unveiled on October 24.