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Repo Rate Hiked to 7.50%: Standing Liquidity Facilities Costlier

Current · Source: Reserve Bank of India · RBI/2010-11/570 · issued 16 Jun 2011 · ~2 min read

Quick answerRBI raised the repo rate by 25 bps to 7.50% effective June 16, 2011. Standing liquidity facilities for banks (export credit refinance) and Primary Dealers (collateralised liquidity support) will now be priced at the new repo rate, increasing borrowing costs for these entities.

The rule, in the simplest words

The RBI raised the repo rate (the rate at which banks borrow from RBI) from 7.25% to 7.50% on June 16, 2011.
Now, banks and Primary Dealers (special firms that trade government bonds) must pay 7.50% for special loans like export credit refinance (loans for exporters) and collateralised liquidity support (emergency loans).
This makes borrowing more expensive for banks, so they may charge higher interest on loans to customers.

How it plays out — a real example

A forex & trade-finance officer in Indore checks the new repo rate of 7.50% and updates the bank's system. She tells her team that the cost for export credit refinance has gone up, so they must adjust loan pricing for exporters to cover the higher expense.

What changed

The repo rate under the Liquidity Adjustment Facility (LAF) was increased by 25 basis points from 7.25% to 7.50%, effective immediately from June 16, 2011. Consequently, the Standing Liquidity Facilities—export credit refinance for banks and collateralised liquidity support for Primary Dealers—are now available at the revised repo rate of 7.50%.

What it means for you

Banks and Primary Dealers will face higher costs for accessing these standing liquidity windows, as the rate has moved up in line with the repo hike. This could tighten liquidity conditions and increase the cost of funds for banks, potentially leading to higher lending rates for customers. The move signals RBI's intent to curb inflationary pressures by making short-term borrowing more expensive.

What you must do

Review your bank's reliance on export credit refinance and assess the impact of the 25 bps rate hike on funding costs.
Communicate the revised rate to treasury and credit teams to adjust pricing strategies for loans and advances.
Monitor liquidity positions closely and consider alternative funding sources if the higher cost becomes a constraint.
Update internal systems and documentation to reflect the new repo rate of 7.50% for standing facilities effective June 16, 2011.

Who it affects

All Scheduled Banks (excluding Regional Rural Banks), Primary Dealers, Treasury departments of banks, Borrowers relying on export credit refinance

❓ Common questions

Regulatory timeline

Stated effective date effective June 16, 2011
Decoded by BankPulse 2026-06-19 01:08 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 June 16, 2011?

The repo rate under the Liquidity Adjustment Facility (LAF) was increased by 25 basis points from 7.25% to 7.50%, effective immediately from June 16, 2011.

Which standing liquidity facilities are affected by this change?

The Standing Liquidity Facilities for banks (export credit refinance) and Primary Dealers (collateralised liquidity support) are now available at the revised repo rate of 7.50%.

Are Regional Rural Banks (RRBs) covered by this notification?

No, the notification explicitly excludes Regional Rural Banks (RRBs) from its scope.

📜 Read the original circular — full text as issued by RBI

RBI/2010-11/570 

 REF.No.MPD.BC.344 /07.01.279/2010-11 

 June 16, 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 Mid-Quarter Monetary Policy Review of   June 16, 2011 , in terms of which the repo rate under the Liquidity Adjustment Facility (LAF) has been increased by 25 basis points from 7.25 per cent to 7.50 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 7.50 per cent with effect from June 16, 2011.

 Yours faithfully,

 (Janak Raj) 

 Adviser-in-Charge

Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2010-11/570 · issued 16 Jun 2011. The plain-English explanation above is BankPulse’s own independent summary.

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Who does what — compliance checklist

💻 IT / Systems

Communicate the revised rate to treasury and credit teams to adjust pricing strategies for loans and advances.
Update internal systems and documentation to reflect the new repo rate of 7.50% for standing facilities effective June 16, 2011.

📜 Compliance

Review your bank's reliance on export credit refinance and assess the impact of the 25 bps rate hike on funding costs.
Monitor liquidity positions closely and consider alternative funding sources if the higher cost becomes a constraint.

Grouped from the action items above — a single circular may involve more than one team.

Worked example & action-note template

Example: if you are a Compliance officer at a bank this circular applies to (All Scheduled Banks (excluding Regional Rural Banks), Primary Dealers, Treasury departments of banks, Borrowers relying on export credit refinance), your first concrete step on “Repo Rate Hiked to 7.50%: Standing Liquidity Facilities Costlier” is: “Review your bank's reliance on export credit refinance and assess the impact of the 25 bps rate hike on funding costs.” (RBI issued this 16 Jun 2011).

Circular: RBI/2010-11/570 -- Repo Rate Hiked to 7.50%: Standing Liquidity Facilities Costlier
Issued: 16 Jun 2011
Action required: Review your bank's reliance on export credit refinance and assess the impact of the 25 bps rate hike on funding costs.
Action required: Communicate the revised rate to treasury and credit teams to adjust pricing strategies for loans and advances.
Action required: Monitor liquidity positions closely and consider alternative funding sources if the higher cost becomes a constraint.
Action required: Update internal systems and documentation to reflect the new repo rate of 7.50% for standing facilities effective June 16, 2011.
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
Evidence filed in compliance register on: ____________

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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=6464&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.