Current · Source: Reserve Bank of India · RBI/2009-10/353 · issued 19 Mar 2010 · ~1 min read
Quick answerRBI raised the fixed repo rate under LAF by 25 bps to 5.0%, effective March 20, 2010. Standing liquidity facilities for banks (export credit refinance) and primary dealers (collateralised liquidity support) will now be available at this higher rate.
The rule, in the simplest words
The RBI (Reserve Bank of India) raised the repo rate (the interest rate at which banks borrow money from RBI) by 25 basis points (0.25%) from 4.75% to 5.0%.
This new rate applies to special loans called 'standing liquidity facilities' for banks (export credit refinance) and primary dealers (collateralised liquidity support).
Banks and primary dealers now have to pay more interest when they use these special borrowing options from the RBI.
The change started on March 20, 2010, and shows the RBI wants to make borrowing a little more expensive to control rising prices (inflation).
How it plays out — a real example
A forex & trade-finance officer in Indore, Priya, checks her bank's daily funding costs and sees that the export credit refinance they use now costs 5.0% instead of 4.75%. She quickly updates her treasury team so they can plan for higher expenses and decide if they need to adjust loan interest rates for customers.
What changed
The fixed repo rate under the Liquidity Adjustment Facility was increased by 25 basis points from 4.75% to 5.0%, effective March 20, 2010. Consequently, the standing liquidity facilities—export credit refinance for banks and collateralised liquidity support for primary dealers—will be priced at the revised repo rate.
What it means for you
Banks and primary dealers will face higher borrowing costs for these standing facilities, directly impacting their liquidity management and net interest margins. This signals RBI's intent to tighten monetary policy, likely to curb inflationary pressures, and may lead to a gradual increase in lending rates for end borrowers.
What you must do
Review your bank's reliance on export credit refinance and assess the impact of the 25 bps hike on funding costs.
Communicate the revised rate to treasury and ALCO teams for immediate liquidity planning.
Evaluate the need to adjust lending rates or deposit rates to maintain net interest margins.
Monitor RBI's future policy actions for further rate changes and adjust liquidity buffers accordingly.
Who it affects
All scheduled banks (excluding RRBs) availing export credit refinance, Primary dealers using collateralised liquidity support, Treasury and ALCO teams managing short-term liquidity
❓ Common questions
Regulatory timeline
Stated effective dateeffective March 20, 2010
Decoded by BankPulse2026-06-19 07:12 IST
Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).
What is the effective date of the new repo rate?
The revised repo rate of 5.0% applies from March 20, 2010, as stated in the circular.
Does this change affect all standing liquidity facilities?
Yes, the circular specifies that both export credit refinance for banks and collateralised liquidity support for primary dealers will be available at the revised repo rate.
Are Regional Rural Banks covered by this circular?
No, the circular explicitly excludes Regional Rural Banks from its scope.
📜 Read the original circular — full text as issued by RBI
RBI/2009-10/353
REF.No.MPD.BC. 328 /07.01.279/2009-10
March 19, 2010
To
All Scheduled Banks [excluding Regional Rural Banks]
and Primary Dealers
Dear Sir/Madam,
Standing Liquidity Facilities for
Banks and Primary Dealers
Please refer to the Reserve Bank’s Press Release 2009-10/1263 dated March 19, 2010, in terms of which the fixed repo rate under the Liquidity Adjustment Facility (LAF) has been increased by 25 basis points from 4.75 per cent to 5.0 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 5.0 per cent with effect from March 20, 2010.
Yours faithfully,
(Janak Raj)
Adviser-in-Charge
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2009-10/353 · issued 19 Mar 2010. The plain-English explanation above is BankPulse’s own independent summary.
Example: if you are a Compliance officer at a bank this circular applies to (All scheduled banks (excluding RRBs) availing export credit refinance, Primary dealers using collateralised liquidity support, Treasury and ALCO teams managing short-term liquidity), your first concrete step on “Repo Rate Hiked 25 bps: Standing Liquidity Facilities Costlier” is: “Review your bank's reliance on export credit refinance and assess the impact of the 25 bps hike on funding costs.” (RBI issued this 19 Mar 2010).
Action required: Review your bank's reliance on export credit refinance and assess the impact of the 25 bps hike on funding costs.
Action required: Communicate the revised rate to treasury and ALCO teams for immediate liquidity planning.
Action required: Evaluate the need to adjust lending rates or deposit rates to maintain net interest margins.
Action required: Monitor RBI's future policy actions for further rate changes and adjust liquidity buffers accordingly.
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 03 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=5539&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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