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Repo Rate Hike: Standing Liquidity Facilities Costlier

Current · Source: Reserve Bank of India · RBI/2010-11/106 · issued 02 Jul 2010 · ~1 min read
Quick answerRBI hiked repo rate by 25 bps to 5.50% effective July 3, 2010. Standing liquidity facilities for banks (export credit refinance) and Primary Dealers (collateralised liquidity support) will now be available at the revised repo rate.
The rule, in the simplest words
How it plays out — a real example

Rohit Mehta, the treasury manager at State Bank of India in Mumbai, checks the RBI notice on July 3 and sees the repo rate is now 5.50%. He quickly informs his ALCO team that the cost of using export‑credit refinance and the collateralised support for the bank’s primary dealer desk has risen, and he adjusts the bank’s short‑term funding mix to rely a bit more on market borrowing, while notifying the treasury staff of the change.

What changed

RBI increased the repo rate under LAF by 25 basis points from 5.25% to 5.50% with immediate effect. Consequently, standing liquidity facilities for banks and Primary Dealers will be priced at the new repo rate from July 3, 2010.

What it means for you

Banks and Primary Dealers will face higher cost for accessing standing liquidity from RBI, impacting their short-term funding costs. This move signals RBI's intent to tighten monetary policy to manage inflation or liquidity conditions.

What you must do

Who it affects

All Scheduled Banks (excluding RRBs), Primary Dealers

❓ 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 July 3, 2010?

The repo rate has been increased by 25 basis points from 5.25% to 5.50%.

Which facilities are impacted by this change?

Standing liquidity facilities for banks (export credit refinance) and Primary Dealers (collateralised liquidity support) will now be available at the revised repo rate of 5.50%.

📜 Read the original circular — full text as issued by RBI
RBI/2010-11/106 REF.No.MPD.BC. 333 /07.01.279/2010-11 July 2, 2010 To All Scheduled Banks [excluding Regional Rural Banks (RRBs)] and Primary Dealers Dear Sir/Madam, Standing Liquidity Facilities for Banks and Primary Dealers Please refer to the Reserve Bank’s Press Release 2010-11/22 dated July 2, 2010 , in terms of which the repo rate under the Liquidity Adjustment Facility (LAF) has been increased by 25 basis points from 5.25 per cent to 5.50 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 5.50 per cent with effect from July 3, 2010. Yours faithfully, (Janak Raj) Adviser-in-Charge Related Press Release/Notification
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2010-11/106 · issued 02 Jul 2010. The plain-English explanation above is BankPulse’s own independent summary.
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Worked example & action-note template

Example: if you are a Compliance officer at a bank this circular applies to (All Scheduled Banks (excluding RRBs), Primary Dealers), your first concrete step on “Repo Rate Hike: Standing Liquidity Facilities Costlier” is: “Review your bank's reliance on export credit refinance and adjust funding strategies accordingly.” (RBI issued this 02 Jul 2010).

  1. Circular: RBI/2010-11/106 -- Repo Rate Hike: Standing Liquidity Facilities Costlier
  2. Issued: 02 Jul 2010
  3. Action required: Review your bank's reliance on export credit refinance and adjust funding strategies accordingly.
  4. Action required: Reassess liquidity management plans to account for higher cost of standing facilities.
  5. Action required: Communicate the revised rate impact to treasury and ALCO teams for immediate action.
  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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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=5856&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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