Current · Source: Reserve Bank of India · RBI/2010-11/386 · issued 25 Jan 2011 · ~1 min read
Quick answerRBI raised the repo rate by 25 bps to 6.50% effective January 25, 2011. Consequently, standing liquidity facilities for banks (export credit refinance) and Primary Dealers (collateralised liquidity support) will now be priced at the new repo rate, increasing their cost.
The rule, in the simplest words
RBI raised the repo rate (the rate at which banks borrow from RBI) by 25 basis points (0.25%) to 6.50% on January 25, 2011.
Standing liquidity facilities for banks (like export credit refinance) and Primary Dealers (collateralised liquidity support) now cost more because they are priced at the new repo rate of 6.50%.
This rate hike makes it more expensive for banks and Primary Dealers to borrow from RBI through these special windows.
The increase signals RBI's effort to control inflation by tightening money supply.
How it plays out — a real example
A forex & trade-finance officer in Indore, Priya, notices that her bank's treasury team has updated the cost for export credit refinance to 6.50%. She now recalculates the interest rate for a local exporter's loan, ensuring the higher funding cost is passed on to maintain the bank's profit margin.
What changed
The repo rate under the Liquidity Adjustment Facility (LAF) was increased by 25 basis points from 6.25% to 6.50% with immediate effect. As a result, the standing liquidity facilities provided to banks (export credit refinance) and Primary Dealers (collateralised liquidity support) are now available at the revised repo rate of 6.50%.
What it means for you
Banks and Primary Dealers will face higher costs for accessing these specific liquidity windows from RBI, directly impacting their funding expenses. This rate hike signals RBI's tightening stance to manage inflation, and banks may need to reassess their liquidity management and lending rates accordingly.
What you must do
Update internal systems to reflect the new repo rate of 6.50% for standing liquidity facilities.
Review the impact on export credit refinance costs and adjust pricing for export loans if necessary.
Communicate the rate change to treasury and ALM teams to recalibrate liquidity and funding strategies.
Monitor RBI's future policy actions for further rate adjustments.
Who it affects
All Scheduled Banks (excluding RRBs), Primary Dealers, Treasury and ALM departments, Export credit borrowers
❓ Common questions
Regulatory timeline
Stated effective dateeffective January 25, 2011
Decoded by BankPulse2026-06-19 02:48 IST
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 January 25, 2011?
The repo rate under LAF has been increased by 25 basis points to 6.50% with immediate effect.
Which liquidity facilities are impacted by this change?
The standing liquidity facilities for banks (export credit refinance) and Primary Dealers (collateralised liquidity support) are now priced at the revised repo rate of 6.50%.
Are Regional Rural Banks (RRBs) affected by this circular?
No, the circular explicitly excludes RRBs from its scope.
📜 Read the original circular — full text as issued by RBI
RBI/2010-11/386
REF.No.MPD.BC.340/07.01.279/2010-11
January 25, 2011
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 Third Quarter Review of Monetary Policy 2010-11 dated January 25, 2011 , in terms of which the repo rate under the Liquidity Adjustment Facility (LAF) has been increased by 25 basis points from 6.25 per cent to 6.50 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 will be available at the revised repo rate, i.e., at 6.50 per cent with effect from January 25, 2011.
Yours faithfully,
(Janak Raj)
Adviser-in-Charge
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2010-11/386 · issued 25 Jan 2011. The plain-English explanation above is BankPulse’s own independent summary.
Update internal systems to reflect the new repo rate of 6.50% for standing liquidity facilities.
📜 Compliance
Review the impact on export credit refinance costs and adjust pricing for export loans if necessary.
Communicate the rate change to treasury and ALM teams to recalibrate liquidity and funding strategies.
Monitor RBI's future policy actions for further rate adjustments.
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), Primary Dealers, Treasury and ALM departments, Export credit borrowers), your first concrete step on “Repo Rate Hiked 25 bps to 6.50%: Standing Liquidity Facilities Costlier” is: “Update internal systems to reflect the new repo rate of 6.50% for standing liquidity facilities.” (RBI issued this 25 Jan 2011).
Action required: Update internal systems to reflect the new repo rate of 6.50% for standing liquidity facilities.
Action required: Review the impact on export credit refinance costs and adjust pricing for export loans if necessary.
Action required: Communicate the rate change to treasury and ALM teams to recalibrate liquidity and funding strategies.
Action required: Monitor RBI's future policy actions for further rate adjustments.
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=6238&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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