**Policy Summary:**
This circular, DBR.No.Ret.BC.10712/01.001/2017-18, issued by the Reserve Bank of India (RBI) on June 06, 2018, announces a change in the Bank Rate. Effective June 06, 2018, the Bank Rate has been increased by 25 basis points, from 6.25% to 6.50%. Consequently, all penal interest rates on shortfalls in reserve requirements that are specifically linked to the Bank Rate have also been revised. Penal interest rates are now Bank Rate plus 3.0 percentage points (9.50% or 9.25% depending on duration of shortfalls) or Bank Rate plus 5.0 percentage points (11.50% or 11.25%), depending on the duration of the shortfall. This change was announced in the Second Bi-Monthly Monetary Policy Statement 2018-19, dated June 06, 2018. For inquiries, contact the Department of Banking Regulation, Central Office, 5th floor, Amar Building, Sir P.M. Road, Mumbai – 400001, Tel No: 022-22603000, Email ID: returnscorbi.org.in.
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 lends money to commercial banks.
Second Bi-Monthly Monetary Policy Statement 2018-19: A monetary policy document released by the Reserve Bank of India.
Department of Banking Regulation, Central Office: A department within the Reserve Bank of India responsible for banking regulation.
Shrimohan Yadav: Chief General Manager at Reserve Bank of India
Mumbai, Maharashtra: City in India where the central office of the Department of Banking Regulation is located.
Scheduled Banks: Banks included in the Second Schedule of the Reserve Bank of India Act, 1934.
Non-Scheduled Banks: Banks not included in the Second Schedule of the Reserve Bank of India Act, 1934.
भारतीय �रज़वर् ब�क
_____________RESERVE BANK OF INDIA________________
www.rbi.org.in
RBI/2017-18/185
DBR.No.Ret.BC.107/12.01.001/2017-18 June 06, 2018
The Chairperson / CEOs of all Scheduled and Non Scheduled Banks
Dear Sir / Madam,
Change in Bank Rate
Please refer to our circular DBR.No.Ret.BC.82/12.01.001/2017-18 dated August
02, 2017 on the captioned subject.
2. As announced in the Second Bi-Monthly Monetary Policy Statement 2018-19
dated June 06, 2018, the Bank Rate stands adjusted by 25 basis points from 6.25
per cent to 6.50 per cent with effect from June 06, 2018.
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
(Shrimohan Yadav)
Chief General Manager
Encl. : As above
ब��कंग िविनयमन िवभाग, क��ीय कायार्लय, 5व� मंिजल, अमर भवन, सर पी एम रोड, 400001
Department of Banking Regulation, Central Office, 5th floor, Amar Building, Sir P.M. Road, Mumbai-400001
टेलीफोन/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
(Effective from June 06, 2018)
Penal interest rates on Bank Rate plus 3.0 Bank Rate plus 3.0 percentage
shortfalls in reserve percentage points points (9.50 per cent) or Bank Rate
requirements (9.25 per cent) or Bank plus 5.0 percentage points (11.50
(depending on duration Rate plus 5.0 per cent).
of shortfalls). percentage points
(11.25 per cent).