**Summary:**
This Reserve Bank of India (RBI) circular, DBR.No.Ret.BC.1012/01.001/2019-20, dated August 07, 2019, addresses changes to the Bank Rate. As announced in the Third Bi-Monthly Monetary Policy Statement 2019-20 of August 07, 2019, the Bank Rate is revised downwards by 35 basis points, from 6.00 percent to 5.65 percent, effective immediately. Consequently, all penal interest rates on shortfalls in reserve requirements specifically linked to the Bank Rate are also revised. The revised penal interest rates are as follows: Bank Rate plus 3.0 percentage points (8.65 percent) or Bank Rate plus 5.0 percentage points (10.65 percent) depending on the duration of shortfalls. This circular is addressed to the Chairpersons/CEOs of all Scheduled and Non-Scheduled Banks. 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. The circular is signed by Dr. S.K. Kar, Chief General Manager.
Key Entities Referenced
Non Scheduled Banks: Banks which are not listed in the Second Schedule of the Reserve Bank of India Act, 1934
Dr. S.K. Kar: Chief General Manager at Reserve Bank of India
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 lends money to commercial banks.
Third Bi-Monthly Monetary Policy Statement 2019-20: A statement released by the Reserve Bank of India outlining the monetary policy for the period.
Department of Banking Regulation: A department within the Reserve Bank of India responsible for regulating banks.
Mumbai, Maharashtra: The city in which the Central Office of the Department of Banking Regulation is located.
Scheduled Banks: Banks listed in the Second Schedule of the Reserve Bank of India Act, 1934
भारतीय �रज़व र् बक�
_____________RESERVE BANK OF INDIA________________
www.rbi.org.in
RBI/2019-20/36
DBR.No.Ret.BC.10/12.01.001/2019-20 August 07, 2019
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.44/12.01.001/2018-19 dated June 06,
2019, on the captioned subject.
2. As announced in the Third Bi-Monthly Monetary Policy Statement 2019-20 of
August 07, 2019, the Bank Rate is revised downwards by 35 basis points from
6.00 per cent to 5.65 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 कायार्लय, 5वीं मंिजल, अमर भवन, सर पी एम रोड , Ÿé¿¤¸ƒÄ 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 (9.00 points (8.65 per cent) or Bank
requirements per cent) or Bank Rate Rate plus 5.0 percentage points
(depending on duration plus 5.0 percentage (10.65 per cent).
of shortfalls). points (11.00 per cent).