No longer current — withdrawn, no replacement on file yet
Source: Reserve Bank of India · RBI/2006-2007/301 · issued 30 Mar 2007 · ~1 min read
Quick answerRBI raised the repo rate by 25 basis points to 7.75% effective March 31, 2007, to contain inflation expectations. The reverse repo rate stays at 6.00%. LAF arrangements from March 2, 2007 continue.
The rule, in the simplest words
RBI raised the repo rate (the rate at which banks borrow from RBI) by 0.25% to 7.75%.
The reverse repo rate (the rate RBI pays banks for parking money) stays at 6.00%.
The special LAF rules from March 2, 2007 are still in place.
This move is to keep prices from rising too fast (control inflation).
How it plays out — a real example
Rajesh, the treasurer of a mid-sized bank, sees the repo rate hike to 7.75%. He recalculates the cost of overnight borrowing from RBI and decides to reduce reliance on repo by tapping more customer deposits, to protect net interest margin.
What changed
The fixed repo rate under LAF was increased by 25 basis points from 7.50% to 7.75%, effective March 31, 2007. The reverse repo rate remains unchanged at 6.00%. The modified LAF arrangements announced on March 2, 2007 continue until further notice.
What it means for you
Banks will face higher cost for borrowing from RBI under repo, tightening liquidity and signaling a hawkish stance to curb inflation. Lending rates may rise as banks pass on the cost. The unchanged reverse repo rate means RBI continues to absorb surplus liquidity at 6.00%.
Historical instruction — do not use for current compliance. This is what was required at the time; it no longer reflects current RBI requirements. If no replacement rule is linked above, that only means none is recorded on our register yet — it does not prove no later applicable rule exists. Confirm on the official RBI source below.
What banks were required to do at the time
Review your bank's liquidity position and adjust borrowing strategy under LAF.
Assess impact on lending rates and communicate potential changes to customers.
Monitor inflation trends and RBI's future policy signals for further rate moves.
Ensure compliance with all LAF terms and acknowledge receipt of this circular.
Who it affects
All Scheduled Commercial Banks (excluding RRBs), Primary Dealers, Treasury and ALM teams, Loan and deposit product managers
❓ Common questions
Regulatory timeline
Stated effective dateeffective March 31, 2007
Decoded by BankPulse2026-07-28 04:07 IST
Status change: withdrawn10 Jul 2026, 04:05 IST
Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).
When does the new repo rate take effect?
The increased repo rate of 7.75% is effective from March 31, 2007.
Why did RBI raise the repo rate?
To contain inflation expectations in light of current macroeconomic, monetary, and anticipated liquidity conditions.
Are the LAF arrangements changed?
No, the modified LAF arrangements from March 2, 2007 continue until further notice.
📜 Read the original circular — full text as issued by RBI
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2006-2007/301 · issued 30 Mar 2007. The plain-English explanation above is BankPulse’s own independent summary.
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=3381&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.
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