**Summary:**
RBI/2017-2018/32 FMOD.MAOG. No. 121/01.01.001/2017-18, issued August 2, 2017, by the Reserve Bank of India (RBI), announces a reduction in the policy Repo rate under the Liquidity Adjustment Facility (LAF) by 25 basis points, decreasing it from 6.25 percent to 6.0 percent, effective immediately. Consequently, the Reverse Repo rate under the LAF is adjusted to 5.75 percent, also effective immediately. This decision was made by the Monetary Policy Committee (MPC) as announced in the Third Bimonthly Monetary Policy Statement, 2017-18. The circular applies to all Scheduled Commercial Banks excluding Regional Rural Banks (RRBs), Scheduled Urban Cooperative Banks, and Standalone Primary Dealers. All other terms and conditions of the existing LAF Scheme remain unchanged. For further information, contact Radha Shyam Ratho, Chief General Manager, Financial Markets Operation Department, Central Office, 1st Floor, Main Building, Shahid Bhagat Singh Road, Fort, Mumbai – 400 001, India. Tel: 22610642, Fax No: 22630981, Email: cgmfmod@rbi.org.in.
Key Entities Referenced
Reserve Bank of India: The central bank of India, often referred to as RBI.
Scheduled Commercial Banks: Banks included in the Second Schedule to the Reserve Bank of India Act, 1934, excluding Regional Rural Banks (RRBs).
Scheduled Urban Cooperative Banks: Cooperative banks that are included in the Second Schedule to the Reserve Bank of India Act, 1934.
Standalone Primary Dealers: Financial institutions authorized to act as market makers in government securities.
Liquidity Adjustment Facility: A tool used by the Reserve Bank of India to manage liquidity in the banking system. Abbreviated as LAF.
Repo Rate: The rate at which the Reserve Bank of India lends money to commercial banks against the security of government securities.
Reverse Repo Rate: The rate at which the Reserve Bank of India borrows money from commercial banks.
Monetary Policy Committee: A committee of the Reserve Bank of India responsible for setting the monetary policy, abbreviated as MPC.
RBI/2017-2018/32
FMOD.MAOG. No 121/01.01.001/2017-18
August 2, 2017
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 Third Bi-monthly Monetary Policy Statement, 2017-18, today, it has
been decided by the Monetary Policy Committee (MPC) to reduce the Repo rate under the
Liquidity Adjustment Facility (LAF) by 25 basis points from 6.25 per cent to 6.0 per cent
with immediate effect.
Consequent to the change in the Repo rate, the Reverse Repo rate under the LAF stands
adjusted to 5.75 per cent with immediate effect.
All other terms and conditions of the extant LAF Scheme will remain unchanged.
Yours sincerely
(Radha Shyam Ratho)
Chief General Manager
Financial Markets Operation Department, Central Office, 1st Floor, Ma in Building, Shahid Bhagat Singh Road, Fort, Mumbai-400 001, India
Tel : 22610642 Fax No:22630981 E-Mail : cgmfmod@rbi.org.in