Current · Source: Reserve Bank of India · RBI/2006-2007/239 · issued 31 Jan 2007 · ~1 min read
Quick answerRBI raised the fixed repo rate under LAF to 7.50% effective immediately. Standing Liquidity Facilities for banks (export credit refinance) and Primary Dealers (collateralised liquidity support) are now available at this new repo rate.
The rule, in the simplest words
The RBI (Reserve Bank of India) raised the repo rate (the interest rate banks pay to borrow money from RBI) to 7.50%.
Banks and Primary Dealers (companies that buy and sell government bonds) now pay 7.50% for special loans called Standing Liquidity Facilities.
This new rate applies right away to export credit refinance (loans banks get for helping exporters) and collateralised liquidity support (loans backed by bonds).
Banks will have to pay more for short-term borrowing from RBI, which may make their own loans to customers more expensive.
How it plays out — a real example
A forex & trade-finance officer in Indore checks the daily treasury update and sees the repo rate for standing liquidity facilities is now 7.50%. She realizes her bank's cost for export credit refinance just went up, so she notes that the bank may need to adjust interest rates on new gold loans to maintain profit margins.
What changed
The fixed repo rate under the Liquidity Adjustment Facility was revised upward to 7.50% with immediate effect. Consequently, the Standing Liquidity Facilities—export credit refinance for banks and collateralised liquidity support for Primary Dealers—are now priced at this new repo rate.
What it means for you
Banks and Primary Dealers will face higher costs for accessing these standing liquidity windows from RBI, directly impacting their short-term funding expenses. This rate hike signals a tightening bias, likely aimed at managing inflationary pressures or liquidity conditions, and may lead to upward adjustments in lending rates.
What you must do
Update internal systems and pricing models to reflect the new 7.50% repo rate for standing liquidity facilities.
Review your bank's reliance on export credit refinance and assess the impact on net interest margins.
Communicate the rate change to treasury and ALCO teams for immediate liquidity and funding strategy adjustments.
Monitor RBI's future policy signals for further rate actions that could affect your cost of funds.
Who it affects
All Scheduled Banks (excluding Regional Rural Banks), Primary Dealers, Treasury departments of banks, Banks availing export credit refinance
❓ Common questions
What is the new repo rate for Standing Liquidity Facilities?
The fixed repo rate under LAF has been revised to 7.50% with immediate effect, and the same rate applies to Standing Liquidity Facilities for banks and Primary Dealers.
Which entities are affected by this change?
All Scheduled Banks (excluding Regional Rural Banks) and Primary Dealers are affected, specifically those availing export credit refinance or collateralised liquidity support from RBI.
When did this rate revision take effect?
The revision is effective from January 31, 2007, as per the circular issued on that date.
📜 Read the original circular — full text as issued by RBI
RBI/2006-2007/239
REF.No.MPD.BC. 289/07.01.279/2006-07
January 31, 2007
To
All Scheduled Banks [excluding Regional Rural Banks (RRBs)]
and Primary Dealers
Dear Sir,
Standing Liquidity Facilities for Banks and Primary Dealers
Please refer to Financial Markets Department Circular FMD.
No. 11/01.01.01/ 2006-07 dated January 31, 2007 on Liquidity Adjustment
Facility – Repo and Reverse Repo Rates.
2. The fixed repo rate under the LAF has been revised to 7.50
per cent with immediate effect. Accordingly, the Standing Liquidity Facilities
provided to Banks (export credit refinance) and Primary Dealers (PDs) (collateralised
liquidity support) from the Reserve Bank would be available at the repo rate
i.e. at 7.50 per cent with immediate effect.
Yours faithfully,
(M. D. Patra)
Adviser-in-Charge
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2006-2007/239 · issued 31 Jan 2007. The plain-English explanation above is BankPulse’s own independent summary.
Update internal systems and pricing models to reflect the new 7.50% repo rate for standing liquidity facilities.
📜 Compliance
Review your bank's reliance on export credit refinance and assess the impact on net interest margins.
Communicate the rate change to treasury and ALCO teams for immediate liquidity and funding strategy adjustments.
Monitor RBI's future policy signals for further rate actions that could affect your cost of funds.
Grouped from the action items above — a single circular may involve more than one team.
Worked example & action-note template
Example: if you are an IT/Systems lead at a bank this circular applies to (All Scheduled Banks (excluding Regional Rural Banks), Primary Dealers, Treasury departments of banks, Banks availing export credit refinance), your first concrete step on “Standing Liquidity Facilities Rate Hiked to 7.50%” is: “Update internal systems and pricing models to reflect the new 7.50% repo rate for standing liquidity facilities.” (RBI issued this 31 Jan 2007).
Circular: RBI/2006-2007/239 -- Standing Liquidity Facilities Rate Hiked to 7.50%
Issued: 31 Jan 2007
Action required: Update internal systems and pricing models to reflect the new 7.50% repo rate for standing liquidity facilities.
Action required: Review your bank's reliance on export credit refinance and assess the impact on net interest margins.
Action required: Communicate the rate change to treasury and ALCO teams for immediate liquidity and funding strategy adjustments.
Action required: Monitor RBI's future policy signals for further rate actions that could affect your cost of funds.
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.
💬 Banker Discussion
Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.
BankPulse Compliance Evidence Pack — generated 05 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=3254&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
Help us keep this accurate
Found an inaccuracy or have an improvement? Tell us. Every report is reviewed by our team before any change is made — nothing goes live unverified.
Public beta — plain-English informational summaries. Always verify against the official RBI source (circular number cited on every page) before making compliance, credit, treasury, audit, or operational decisions. · Join our WhatsApp channel ↗
BANKPULSE · FREE DAILY BRIEF
Get RBI updates for your role
Every important RBI update, decoded in plain English — for your career, exams & financial awareness.
We collect only your email, name and role, used solely to send your brief — never sold or shared. Withdraw anytime via the unsubscribe link in any email. Independent platform, not affiliated with the RBI. Information, not legal advice.
REPORT AN ERROR · BETA
Spotted an error? Earn 500 BankPulse Credits
Help us stay accurate. If your correction is verified true and approved by our founder, you earn 500 BankPulse Credits — redeemable when the platform monetises.
Reviewed by a human before any credit is awarded. We never change the site from crowd input without verification.
WANT A NEW FEATURE · BETA
What would make BankPulse more useful for you?
Tell us what to build next — a tool, a data view, a role page, anything. We read every suggestion.
Thank you — your ideas directly shape what we build.