**Summary:**
This circular, RBI20171834 DBR.No.Ret.BC.8212.01.001201718, issued by the Reserve Bank of India (RBI) on August 02, 2017, announces a change in the Bank Rate. Effective August 02, 2017, the Bank Rate is adjusted downwards by 25 basis points, from 6.50 percent to 6.25 percent, as per the Third Bi-Monthly Monetary Policy Statement 2017-18. Consequently, all penal interest rates on shortfalls in reserve requirements that are specifically linked to the Bank Rate are also revised. The penal interest rates are Bank Rate plus 3.0 percentage points (9.25% existing, 9.50% revised) or Bank Rate plus 5.0 percentage points (11.25% existing, 11.50% revised) depending on the duration of the shortfalls.
The circular is addressed to the Chairpersons/CEOs of 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. Telephone: 022-22603000. Email: returnscorbi.org.in. The circular is signed by Dr. S. K. Kar, Chief General Manager.
Key Entities Referenced
Bank Rate: The standard rate at which the Reserve Bank of India (RBI) is prepared to buy or rediscount bills of exchange or other commercial paper eligible for purchase under the Reserve Bank of India Act.
Reserve Bank of India: The central bank of India, responsible for regulating the banking system.
DBR.No.Ret.BC.8212.01.001201718: Reference number of the RBI circular related to the change in Bank Rate.
DBR.No.Ret.BC.5812.01.001201617: Reference number of a previous RBI circular related to the captioned subject.
Third BiMonthly Monetary Policy Statement 201718: Monetary policy statement by the RBI in which the adjustment to the Bank Rate was announced.
Dr.S K Kar: Chief General Manager at the Department of Banking Regulation, Reserve Bank of India.
Department of Banking Regulation: A department within the Reserve Bank of India.
Mumbai, Maharashtra: Location of the Central Office of the Department of Banking Regulation.
RBI/2017-18/34
DBR.No.Ret.BC.82/12.01.001/2017-18 August 02, 2017
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.58/12.01.001/2016-17 dated April 06,
2017 on the captioned subject.
2. As announced in the Third Bi-Monthly Monetary Policy Statement 2017-18
dated August 02, 2017, the Bank Rate stands adjusted by 25 basis points from
6.50 per cent to 6.25 per cent with effect from August 02, 2017.
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
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
(Effective from August 02, 2017)
Penal interest rates on Bank Rate plus 3.0 Bank Rate plus 3.0 percentage
shortfalls in reserve percentage points points (9.25 per cent) or Bank Rate
requirements (9.50 per cent) or Bank plus 5.0 percentage points (11.25
(depending on duration Rate plus 5.0 per cent).
of shortfalls). percentage points
(11.50 per cent).