**Summary:**
This Reserve Bank of India (RBI) circular (DOR.No.Ret.BC.53/12.01.001/2019-20) dated March 27, 2020, announces a revision to the Bank Rate. In accordance with the Seventh Bi-Monthly Monetary Policy Statement 2019-20, the Bank Rate is reduced by 75 basis points, from 5.40% to 4.65%, effective immediately. Consequently, all penal interest rates on shortfalls in reserve requirements that are specifically linked to the Bank Rate are also revised.
Specifically, penal interest rates on shortfalls in reserve requirements, which are linked to the Bank Rate plus 3.0 percentage points, are revised from 8.40% to 7.65%. Penal interest rates linked to the Bank Rate plus 5.0 percentage points are revised from 10.40% to 9.65%, depending on the duration of the shortfalls.
The circular is addressed to all scheduled and non-scheduled banks. For further information, contact the Department of Banking Regulation, Central Office, 5th floor, Amar Building, Sir P.M. Road, Mumbai – 400001. Tel No: 022-22603000. Email ID: returns@rbi.org.in. The circular is signed by Dr. S.K. Kar, Chief General Manager.
Key Entities Referenced
Reserve Bank of India: The central bank of India, responsible for monetary policy and regulation of the banking sector.
Bank Rate: The interest rate at which the Reserve Bank of India is ready to buy or rediscount bills of exchange or other commercial papers. It is revised in this notification.
DBR.No.Ret.BC.1912.01.001201920: Reference number of a previous circular issued by the Department of Banking Regulation, Reserve Bank of India, dated October 04, 2019, related to the Bank Rate.
Seventh BiMonthly Monetary Policy Statement 201920: A monetary policy statement released by the Reserve Bank of India, in which the revision of the Bank Rate was announced.
Department of Banking Regulation: A department within the Reserve Bank of India responsible for regulating banks.
Mumbai, Maharashtra: City in India where the Central Office of the Department of Banking Regulation is located.
Dr. S.K.Kar: Chief General Manager at Reserve Bank of India, who signed the circular.
All Scheduled and Non Scheduled Banks: The entities to which this notification is addressed
भारतीय �रज़व र् बक�
_____________ RESERVE BANK OF INDIA______________
www.rbi.org.in
RBI/2019-20/190
DOR.No.Ret.BC.53/12.01.001/2019-20 March 27, 2020
All Scheduled and Non Scheduled Banks
Dear Sir / Madam
Change in Bank Rate
Please refer to our circular DBR.No.Ret.BC.19/12.01.001/2019-20 dated October
04, 2019, on the captioned subject.
2. As announced in the Seventh Bi-Monthly Monetary Policy Statement 2019-20 of
March 27, 2020, the Bank Rate is revised downwards by 75 basis points from 5.40
per cent to 4.65 per cent with immediate effect.
3. All penal interest rates on shortfall in reserve requirements, which are
specifically linked to the Bank Rate, also stand revised as indicated in the Annex.
Yours faithfully,
(Dr. S.K.Kar)
Chief General Manager
Encl. : As above
ब��कंग �व�नयमन �वभाग, क�द्र�य कायालर् य, 5वी ं मिंजल, अमर भवन, सर पी एम रोड, 400001
Department of Banking Regulation, Central Office, 5th floor, Amar Building, Sir P.M. Road, Mumbai-400001
टेल�फोन/Tel No:022-22603000 Email ID: returnsco@rbi.org.inAnnex
Penal Interest Rates which are linked to the Bank Rate
Item Existing Rate Revised Rate
(With immediate effect)
Penal interest rates on Bank Rate plus 3.0 Bank Rate plus 3.0 percentage
shortfalls in reserve percentage points (8.40 points (7.65 per cent) or Bank
requirements per cent) or Bank Rate Rate plus 5.0 percentage points
(depending on duration plus 5.0 percentage (9.65 per cent).
of shortfalls). points (10.40 per cent).