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Repo and Reverse Repo Hiked 25 bps in Mid-Quarter Review

Current · Source: Reserve Bank of India · RBI/2010-2011/431 · issued 17 Mar 2011 · ~1 min read
Quick answerRBI raised repo rate to 6.75% and reverse repo to 5.75%, effective immediately. This 25 bps hike tightens liquidity and signals a hawkish stance, impacting your bank's borrowing costs and lending rates.
The rule, in the simplest words
How it plays out — a real example

After the RBI's rate hike, Rohan, a credit & lending officer in Indore, needs to adjust the interest rates for gold loans to ensure the bank's net interest margins aren't squeezed. He reviews the loan pricing strategies and communicates the changes to the credit team to ensure alignment with the new rates.

What changed

The repo rate under LAF was increased from 6.50% to 6.75%, and the reverse repo rate from 5.50% to 5.75%, both by 25 basis points. All other LAF scheme terms remain unchanged.

What it means for you

Banks will face higher cost for overnight borrowing from RBI, squeezing net interest margins if lending rates aren't adjusted. The reverse repo hike makes parking surplus funds more attractive, potentially reducing credit flow. This signals RBI's intent to curb inflation, so you should review your asset-liability management and loan pricing strategies.

What you must do

Who it affects

All scheduled commercial banks (excluding RRBs), Primary dealers, Treasury departments, Loan and deposit pricing teams

❓ Common questions

When did this rate change take effect?

The hike was announced on March 17, 2011, and took effect immediately from that date.

What are the new repo and reverse repo rates?

The repo rate is now 6.75% and the reverse repo rate is 5.75%, each increased by 25 basis points.

Does this affect any other LAF terms?

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

📜 Read the original circular — full text as issued by RBI
RBI/2010-2011/431 FMD.MOAG. No.57/01.01.01/2010-11 March 17, 2011 All Scheduled Commercial Banks (excluding RRBs) and Primary Dealers Dear Sir, Liquidity Adjustment Facility – Repo and Reverse Repo Rates As announced today in the Mid-Quarter Monetary Policy Review , it has been decided to increase the repo rate under the Liquidity Adjustment Facility (LAF) by 25 basis points from 6.50 per cent to 6.75 per cent and the reverse repo rate by 25 basis points from 5.50 per cent to 5.75 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 (Nishita Raje) Director
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2010-2011/431 · issued 17 Mar 2011. The plain-English explanation above is BankPulse’s own independent summary.
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Who does what — compliance checklist
💻 IT / Systems
  • Communicate rate changes to treasury and credit teams for alignment.
📜 Compliance
  • Review and adjust your MCLR and base rate to reflect higher funding costs.
  • Reassess liquidity management to optimize use of the LAF window.
  • Monitor inflation data and RBI guidance for further policy moves.
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 commercial banks (excluding RRBs), Primary dealers, Treasury departments, Loan and deposit pricing teams), your first concrete step on “Repo and Reverse Repo Hiked 25 bps in Mid-Quarter Review” is: “Review and adjust your MCLR and base rate to reflect higher funding costs.” (RBI issued this 17 Mar 2011).

  1. Circular: RBI/2010-2011/431 -- Repo and Reverse Repo Hiked 25 bps in Mid-Quarter Review
  2. Issued: 17 Mar 2011
  3. Action required: Review and adjust your MCLR and base rate to reflect higher funding costs.
  4. Action required: Reassess liquidity management to optimize use of the LAF window.
  5. Action required: Communicate rate changes to treasury and credit teams for alignment.
  6. Action required: Monitor inflation data and RBI guidance for further policy moves.
  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=6290&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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