**Policy Summary:**
This circular, reference number RBI20172018183 FMOD.MAOG. No.123/01.01.001/2017-18, dated June 6, 2018, issued by the Reserve Bank of India (RBI), announces changes to the Liquidity Adjustment Facility (LAF) Repo and Reverse Repo Rates. Addressed to all Scheduled Commercial Banks (excluding RRBs), Scheduled Urban Cooperative Banks, and Standalone Primary Dealers, the circular conveys the decision of the Monetary Policy Committee (MPC) to increase the policy Repo rate under the LAF by 25 basis points, raising it from 6.0 percent to 6.25 percent, effective immediately. Consequently, the Reverse Repo rate under the LAF is adjusted to 6.00 percent, also with immediate effect. All other terms and conditions of the existing LAF Scheme remain unchanged. The circular is issued by Radha Shyam Ratho, Chief General Manager, Financial Markets Operation Department, Central Office, located at 1st Floor, Main Building, Shahid Bhagat Singh Road, Fort, Mumbai-400 001, India. Contact information includes Tel: 22610642, Fax No: 22630981, and Email: cgmfmod@rbi.org.in.
Key Entities Referenced
Liquidity Adjustment Facility: A tool used by the Reserve Bank of India (RBI) to manage liquidity in the money market.
Repo rate: The rate at which the Reserve Bank of India (RBI) lends money to commercial banks against the security of government securities.
Reverse Repo rate: The rate at which the Reserve Bank of India (RBI) borrows money from commercial banks.
Monetary Policy Committee (MPC): A committee of the Reserve Bank of India (RBI) that is responsible for setting monetary policy.
All Scheduled Commercial Banks: All commercial banks in India that are listed in the Second Schedule to the Reserve Bank of India Act, 1934, excluding Regional Rural Banks (RRBs).
Scheduled Urban Cooperative Banks: Urban Cooperative Banks that are included in the Second Schedule of the Reserve Bank of India Act, 1934.
Standalone Primary Dealers: Financial institutions authorized by the Reserve Bank of India (RBI) to underwrite and deal in government securities.
Mumbai, Maharashtra: The location of the Central Office of the Financial Markets Operation Department, Reserve Bank of India.
RBI/2017-2018/183
FMOD.MAOG. No.123 /01.01.001/2017-18
June 6, 2018
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 Second Bi-monthly Monetary Policy Statement, 2018-19, today, it
has been decided by the Monetary Policy Committee (MPC) to increase the policy Repo
rate under the Liquidity Adjustment Facility (LAF) by 25 basis points from 6.0 per cent to
6.25 per cent with immediate effect.
2. Consequent to the change in the Repo rate, the Reverse Repo rate under the LAF
stands adjusted to 6.00 per cent with immediate effect.
3. 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