**Policy Summary:**
This circular, DBR.No.Ret.BC.9012/01.001/2015-16, issued by the Reserve Bank of India (RBI) on April 05, 2016, announces a change in the Bank Rate. Effective April 05, 2016, the Bank Rate has been adjusted downwards by 75 basis points, from 7.75 percent to 7.0 percent, as stated in the First Bi-Monthly Monetary Policy Statement 2016-17. Consequently, all penal interest rates on shortfalls in reserve requirements that are specifically linked to the Bank Rate have also been revised. The penal interest rates on shortfalls in reserve requirements are now Bank Rate plus 3.0 percentage points (10.00 percent) or Bank Rate plus 5.0 percentage points (12.00 percent) depending on the duration of the shortfalls.
For further information, contact S.S. Barik, Chief General Manager, Department of Banking Regulation, Central Office, World Trade Centre, Centre-1, Cuffe Parade, Mumbai – 400005. Contact can be made via Tel No: 022-22188770, Fax No: 022-22150772, or Email ID: cgmicdbrcorbi.org.in. The RBI website is www.rbi.org.in.
Key Entities Referenced
Reserve Bank of India: The central bank of India, responsible for monetary policy and regulation of the banking system.
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.
DBR.No.Ret.BC.90/12.01.001/2015-16: Reference number of the circular issued by the Department of Banking Regulation of the Reserve Bank of India.
First Bi-Monthly Monetary Policy Statement 2016-17: A monetary policy statement released by the Reserve Bank of India.
Department of Banking Regulation: A department of the Reserve Bank of India.
Mumbai, Maharashtra: The city in which the Central Office of the Department of Banking Regulation is located.
S.S.Barik: Chief General Manager at Reserve Bank of India
भारतीय ररज़र् व बकैं
_____________ RESERVE BANK OF INDIA_____________
www.rbi.org.in
RBI/2015-16/358
DBR.No.Ret.BC.90/12.01.001/2015-16 April 05, 2016
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.42/12.01.001/2015-16 dated
September 29, 2015 on the captioned subject.
2. As announced in the First Bi-Monthly Monetary Policy Statement 2016-17
dated April 05, 2016, the Bank Rate stands adjusted by 75 basis points from 7.75
per cent to 7.0 per cent with effect from April 05, 2016.
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
(S.S.Barik)
Chief General Manager
Encl. : As above
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Department of Banking Regulation, Central Office, World Trade Centre, Centre-1, Cuff Parade, Mumbai – 400005
टेलीफोि/Tel No:022-22188770 फैक् स/Fax No:022-22150772 Email ID: cgmicdbrco@rbi.org.inAnnex
Penal Interest Rates which are linked to the Bank Rate
Item Existing Rate Revised Rate
(Effective from April 05, 2016)
Penal interest rates on Bank Rate plus 3.0 Bank Rate plus 3.0 percentage
shortfalls in reserve percentage points points (10.00 per cent) or Bank
requirements (10.75 per cent) or Rate plus 5.0 percentage points
(depending on duration Bank Rate plus 5.0 (12.00 per cent).
of shortfalls). percentage points
(12.75 per cent).