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Repo and Reverse Repo Rates Hiked by 25 bps

Current · Source: Reserve Bank of India · RBI/2010-11/256 · issued 02 Nov 2010 · ~1 min read
Quick answerRBI raised repo rate to 6.25% and reverse repo rate to 5.25%, effective immediately, as part of the Second Quarter Review of Monetary Policy 2010-11. This 25 bps hike tightens liquidity and signals a hawkish stance.
The rule, in the simplest words
How it plays out — a real example

A branch operations officer in Indore, Priya, sees the repo rate hike and knows her bank's borrowing cost from RBI just went up. She adjusts the interest rate on new gold loans by 0.25% to keep the bank's profit stable, explaining to customers that the RBI's move to fight inflation is why their loan costs a bit more now.

What changed

The repo rate under LAF was increased from 6.00% to 6.25%, and the reverse repo rate from 5.00% to 5.25%, both by 25 basis points. All other LAF scheme terms remain unchanged.

What it means for you

Banks will face higher cost of borrowing from RBI, squeezing net interest margins. Lending and deposit rates may rise, impacting loan demand and profitability. This signals RBI's intent to curb inflation.

What you must do

Who it affects

All scheduled commercial banks (excluding RRBs), Primary dealers, Treasury departments, Retail and corporate borrowers

❓ Common questions

When did this rate hike take effect?

The hike was effective immediately from November 2, 2010, as announced in the Second Quarter Review of Monetary Policy.

What are the new repo and reverse repo rates?

The repo rate is now 6.25% and the reverse repo rate is 5.25%, both increased by 25 basis points.

Does this change any other LAF terms?

No, all other terms and conditions of the LAF scheme remain unchanged.

📜 Read the original circular — full text as issued by RBI
RBI/2010-11/256 FMD.MOAG. No.53/01.01.01/2010-11 November 2, 2010 All Scheduled Commercial Banks (excluding RRBs) and Primary Dealers Dear Sir, Liquidity Adjustment Facility – Repo and Reverse Repo Rates As announced today in the Second Quarter Review of Monetary Policy 2010-11 , it has been decided to increase the repo rate under the liquidity adjustment facility (LAF) by 25 basis points from 6.00 per cent to 6.25 per cent and the reverse repo rate by 25 basis points from 5.00 per cent to 5.25 per cent with immediate effect. 2. All other terms and conditions of the current LAF Scheme will remain unchanged. 3. Please acknowledge receipt. Yours sincerely (P. Krishnamurthy) Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2010-11/256 · issued 02 Nov 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 commercial banks (excluding RRBs), Primary dealers, Treasury departments, Retail and corporate borrowers), your first concrete step on “Repo and Reverse Repo Rates Hiked by 25 bps” is: “Review asset-liability management to absorb higher funding costs.” (RBI issued this 02 Nov 2010).

  1. Circular: RBI/2010-11/256 -- Repo and Reverse Repo Rates Hiked by 25 bps
  2. Issued: 02 Nov 2010
  3. Action required: Review asset-liability management to absorb higher funding costs.
  4. Action required: Assess impact on loan pricing and adjust lending rates accordingly.
  5. Action required: Communicate rate changes to customers and treasury teams.
  6. Action required: Monitor liquidity position and LAF usage patterns.
  7. Owner: ____________ Target date: ____________
  8. Board/committee approval needed? Y / N
  9. 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=6073&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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