Amid demands of more rate cuts, RBI Governor D Subbarao has met Finance Minister Pranab Mukherjee and assured him of monitoring the ongoing situation and taking "appropriate policy action", if necessary.

"The Governor assured the Finance Minister that the Reserve Bank is constantly monitoring the situation and will take appropriate policy action, as may be necessary," the central bank said in a statement on Monday.

The Governor briefed the Minister last night on the evolution of the global financial crisis, the outlook for the global economy and the response of the advanced and the emerging economies, the statement said.

In January and February, Subbarao had met other central bank governors in Basel, Switzerland, Kuala Lumpur and Malaysia to discuss the measures taken by the developed and developing countries to counter the global financial crisis.

The bank has injected over Rs 4,00,000 crore of liquidity into the system since Lehman Brothers declared bankruptcy.

However, the central bank refrained from cutting rates at its quarterly monetary review announced in late January. The industry is pitching for more rate cuts as industrial growth turned negative for the second time this fiscal, a rarity in independent India.