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Repo Rate Cut to 4.75%: Standing Liquidity Facilities Cheaper

Current · Source: Reserve Bank of India · RBI/2008-09/445 · issued 21 Apr 2009 · ~1 min read
Quick answerRBI cut the fixed repo rate under LAF by 25 bps to 4.75% effective April 21, 2009. Standing liquidity facilities for banks (export credit refinance) and Primary Dealers (collateralised liquidity support) are now available at this lower rate.
The rule, in the simplest words
How it plays out — a real example

A forex & trade-finance officer in Indore, Mrs. Patel, was happy to see the repo rate cut as it would reduce the interest she pays on funds borrowed from RBI to support her export credit refinance. This would help her manage her gold-loan business more efficiently and pass on the benefits to her customers.

What changed

The fixed repo rate under the Liquidity Adjustment Facility was reduced by 25 basis points from 5.0% to 4.75% with immediate effect. Consequently, the standing liquidity facilities provided to banks for export credit refinance and to Primary Dealers for collateralised liquidity support are now priced at the revised repo rate of 4.75%.

What it means for you

Banks and Primary Dealers will now pay lower interest on funds borrowed from RBI under these standing facilities, reducing their cost of liquidity. This rate cut signals RBI's accommodative stance to support credit flow and economic activity during the 2009 slowdown.

What you must do

Who it affects

All scheduled banks (excluding RRBs) availing export credit refinance, Primary Dealers using collateralised liquidity support, Treasury departments managing LAF operations

❓ Common questions

Regulatory timeline

Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).

What is the new repo rate effective from April 21, 2009?

The fixed repo rate under LAF has been reduced by 25 basis points to 4.75% per annum.

Which facilities are impacted by this rate change?

Standing liquidity facilities for banks (export credit refinance) and Primary Dealers (collateralised liquidity support) are now available at the revised repo rate of 4.75%.

📜 Read the original circular — full text as issued by RBI
Please refer to the Reserve Bank’s Annual Policy Statement 2009-2010 dated April 21, 2009, in terms of which the fixed repo rate under the Liquidity Adjustment Facility (LAF) has been reduced by 25 basis points from 5.0 per cent to 4.75 per cent with immediate effect. 2. 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 revised repo rate, i.e., at 4.75 per cent with effect from April 21, 2009.
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2008-09/445 · issued 21 Apr 2009. The plain-English explanation above is BankPulse’s own independent summary.
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Who does what — compliance checklist
💻 IT / Systems
  • Update your treasury systems to reflect the new repo rate of 4.75% for all standing liquidity facility transactions effective April 21, 2009.
  • Communicate the rate change to relevant treasury and credit teams for accurate pricing of linked products.
📜 Compliance
  • Review your export credit refinance availed and ensure interest calculations align with the revised rate.
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 RRBs) availing export credit refinance, Primary Dealers using collateralised liquidity support, Treasury departments managing LAF operations), your first concrete step on “Repo Rate Cut to 4.75%: Standing Liquidity Facilities Cheaper” is: “Update your treasury systems to reflect the new repo rate of 4.75% for all standing liquidity facility transactions effective April 21, 2009.” (RBI issued this 21 Apr 2009).

  1. Circular: RBI/2008-09/445 -- Repo Rate Cut to 4.75%: Standing Liquidity Facilities Cheaper
  2. Issued: 21 Apr 2009
  3. Action required: Update your treasury systems to reflect the new repo rate of 4.75% for all standing liquidity facility transactions effective April 21, 2009.
  4. Action required: Review your export credit refinance availed and ensure interest calculations align with the revised rate.
  5. Action required: Communicate the rate change to relevant treasury and credit teams for accurate pricing of linked products.
  6. Owner: ____________ Target date: ____________
  7. Board/committee approval needed? Y / N
  8. 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.

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Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=4938&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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