RBI cuts the bank rate and repo rate by 25 basis points

Reserve bank of India cuts the bank rate and  repo rate by 25 basis points. Rbi announced the mid term monetary policy on 19 March 2013 and cuts the bank rate and repo rate by 25 basis points. Full note is as under.


Bank Rate
As announced in the Mid-Quarter Review of Monetary Policy 2012-13, the Bank Rate stands adjusted by 25 basis points from 8.75 per cent to 8.50 per cent with effect from March 19, 2013.

2. All penal interest rates on shortfall in reserve requirements, which are specifically linked to the Bank Rate, also stand revised as indicated in Annex.

3. Please acknowledge receipt.
Penal Interest Rates which are linked to the Bank Rate
Item
Existing Rate
Revised Rate
(Effective from March 19, 2013)
Penal interest rates on shortfalls in reserve requirements (depending on duration of shortfalls).
Bank Rate plus 3.0 percentage points (11.75 per cent) or Bank Rate plus 5.0 percentage points (13.75 per cent).
Bank Rate plus 3.0 percentage points (11.50 per cent) or Bank Rate plus 5.0 percentage points (13.50 per cent).
Liquidity Adjustment Facility – Repo and Reverse Repo 
and Marginal Standing Facility Rates

As announced today in the Mid-Quarter Review of the Monetary Policy 2012-13, it has been decided to reduce the Repo rate under the Liquidity Adjustment Facility (LAF) by 25 basis points from 7.75 per cent to 7.50 per cent with immediate effect.

2. Consequent to the change in the Repo rate, the Reverse Repo rate under the LAF and the Marginal Standing Facility (MSF) rate will stand automatically adjusted to 6.50 per cent and 8.50 per cent respectively with immediate effect.

3. All other terms and conditions of the current LAF and MSF schemes will remain unchanged.

4. Please acknowledge receipt.
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