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Loan Financing in India

RBI Monetary Policy Tools

Core Sector Data

BANK RATE is the standard rate at which the Central Bank i.e. RBI buys or rediscounts Bills of Exchange & other Commercial Papers eligible for such purchase under RBI Act, 1934. Bank Rate was realigned to MSF in one time technical adjustment effective from February, 2012.
MSF MSF or Marginal Standing Facility is the penal rate that Banks should pay if they borrow from RBI by dipping into the stipulated SLR holding .
Bank Rate

 

SLR

Known as Statutory Liquidity Ratio which is the minimum percent of Net Demand and Time Liabilities (DTL) which the Banks have to keep with RBI or in Currency chests in the shape of cash, gold and or unencumbered approved securities. Till 29/03/1985, SLR was calculated on basis of DTL as on every Friday in the following week on daily basis and thereafter  daily on a fortnightly basis as on last Friday of second Preceding fortnight.

*On net DTL as on 03/04/1992+30% of incremental increase in Net DTL over figure of 03/04/1992. Then from 09/01/1993-21/08/1993 - On net DTL as on 03/04/1992. From 18/09/1993 to 15/10/1993 -37,25% of net DTL of 17/9/1993 +25% of incremental increase in Net DTL over figure of 17/09/1993. **From 16/10/1993 to 16/09/1994 on Net DTL as of 17/9/1993. 29/10/1004--SLR on Net DTL 30/9/1994 +25% of incremental increase in Net DTL over figure of 30/09/1994

Past SLRs
   
   

 

CRR

Known as Cash Reserve Ratio, it is a certain minimum percent of total demand and Time liabilities that is to be kept as cash with RBI. Originally, RBI could stipulate CRR between 3% to 30%. After enactment of RBI Amendment Bill, 2006, the floor as well as the ceiling rates have been removed.

With effect from 27/07/2013,Banks asked to maintain higher average cash reserve ratio of 99% of the requirement on daily basis as against earlier 70%.

Liquidity Adjustment Facility (LAF ) for each bank reduced from 1% of the total deposits to 0.5% w.e.f. 24/07/2013. Total amount of funds available to a standalone Primary Dealer under LAF will be capped at 100% of the individual PD's net owned funds as per the latest audited balance sheet.

Past CRRs
Past CRRs
   

 

Repo Rate

It is the rate at which RBI lends money overnight to Banks.

Repo & Reverse Repo comparison

Past Rates  

 

Reverse RepoRate

It is the rate at which Banks park their excess liquidity with RBI for short term. Reverse Repo was independent of Repo till 03/05/2011 and was being announced separately. With effect from 03/05/2011, it was notified that Reverse Repo would be less by 1% from the Repo rate and shall be automatically linked and hence no separate announcement.

Past Rates

 

Loan restrictions to Bank Directors & Directors' Relatives

 

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