**Summary:**
This notification, RBI20152016357 FMOD.MAOG. No. 112 / 01.01.001/2015-16, issued by the Reserve Bank of India (RBI) on April 05, 2016, announces a revision in the Liquidity Adjustment Facility (LAF) Repo and Reverse Repo rates. The Repo rate is reduced by 25 basis points from 6.75 percent to 6.50 percent. Simultaneously, the Reverse Repo rate is increased by 25 basis points from 5.75 percent to 6.00 percent. These changes are effective immediately upon the date of the notification. The circular is addressed to All Scheduled Commercial Banks excluding RRBs, Scheduled Urban Cooperative Banks and Standalone Primary Dealers. All other terms and conditions of the current LAF Scheme remain unchanged. M. Rajeshwar Rao, Chief General Manager, is the signatory of the notification.
Key Entities Referenced
Liquidity Adjustment Facility: A monetary policy instrument used by the Reserve Bank of India (RBI) to manage liquidity in the banking system.
Repo rate: The rate at which commercial banks borrow money from the Reserve Bank of India (RBI) against government securities.
Reverse Repo rate: The rate at which the Reserve Bank of India (RBI) borrows money from commercial banks.
Scheduled Commercial Banks: Banks in India that are listed in the Second Schedule to the Reserve Bank of India Act, 1934.
Scheduled Urban Cooperative Banks: Cooperative banks in urban areas that are included in the Second Schedule to the Reserve Bank of India Act, 1934.
M. Rajeshwar Rao: Chief General Manager at Reserve Bank of India.
Reserve Bank of India: The central bank of India.
RRBs: Regional Rural Banks in India
RBI/2015-2016/357
FMOD.MAOG. No. 112 /01.01.001/2015-16
April 05, 2016
All Scheduled Commercial Banks (excluding RRBs), Scheduled Urban Co-operative Banks and
Standalone Primary Dealers
Madam / Sir,
Liquidity Adjustment Facility – Repo and Reverse Repo Rates
As announced in the Monetary policy by the Governor today, it has been decided to reduce the
Repo rate under the Liquidity Adjustment Facility (LAF) by 25 basis points from 6.75 per cent to
6.50 per cent.
Further, the Reverse Repo rate under the LAF has been increased by 25 basis points from 5.75
percent to 6.00 percent.
These changes will come into force with immediate effect. All other terms and conditions of the
current LAF Scheme will remain unchanged.
Yours sincerely
(M. Rajeshwar Rao)
Chief General Manager