Home › Circulars › RBI/2012-13/402

Bank Rate Cut by 25 bps to 8.75%

No longer current — withdrawn, no replacement on file yet
Source: Reserve Bank of India · RBI/2012-13/402 · issued 29 Jan 2013 · ~1 min read
Quick answerRBI reduced the Bank Rate from 9.00% to 8.75% effective January 29, 2013, following the Third Quarter Review of Monetary Policy 2012-13. Penal interest rates on reserve shortfalls linked to Bank Rate also adjusted downward.

What changed

The Bank Rate was lowered by 25 basis points from 9.00% to 8.75%, effective January 29, 2013. Consequently, penal interest rates on shortfalls in reserve requirements, which are tied to the Bank Rate, were revised: the rate of Bank Rate plus 3.0 percentage points dropped from 12.00% to 11.75%, and Bank Rate plus 5.0 percentage points fell from 14.00% to 13.75%.

What it means for you

This reduction signals a slight easing in RBI's stance, potentially lowering borrowing costs for banks. For lenders, the lower penal rates on reserve shortfalls reduce the cost of non-compliance with reserve requirements, offering some relief on liquidity management.

Historical instruction — do not use for current compliance. This is what was required at the time; it no longer reflects current RBI requirements. If no replacement rule is linked above, that only means none is recorded on our register yet — it does not prove no later applicable rule exists. Confirm on the official RBI source below.

What banks were required to do at the time

Who it affects

All Scheduled Commercial Banks, Local Area Banks, Treasury departments, Compliance teams

❓ 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 effective date of the Bank Rate change?

The new Bank Rate of 8.75% is effective from January 29, 2013.

How are penal interest rates on reserve shortfalls affected?

Penal rates linked to Bank Rate are reduced: Bank Rate plus 3 percentage points becomes 11.75% (from 12.00%), and Bank Rate plus 5 percentage points becomes 13.75% (from 14.00%).

📜 This document’s life story (1 recorded event, each backed by RBI’s own words)
Repealed by RBI/2025-26/100 — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
RBI’s words: “Official withdrawal register entry #1177: DBOD.No.Ret.BC.77/12.01.001/2012-13 — "Bank Rate" dated January 29, 2013”
📜 Read the original circular — full text as issued by RBI
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All penal interest rates on shortfall in reserve requirements, which are specifically linked to the Bank Rate, also stand revised as indicated in Annex . 3. Please acknowledge receipt. Yours faithfully (Murli Radhakrishnan) Chief General Manager Encl: as above Annex Penal Interest Rates which are linked to the Bank Rate Item Existing Rate Revised Rate (Effective from January 29, 2013 Penal interest rates on shortfalls in reserve requirements (depending on duration of shortfalls). Bank Rate plus 3.0 percentage points (12.00 per cent) or Bank Rate plus 5.0 percentage points (14.00 per cent). Bank Rate plus 3.0 percentage points (11.75 per cent) or Bank Rate plus 5.0 percentage points (13.75 per cent). 2026 All Months January February March April May June July August September October November December 2025 All Months January February March April May June July August September October November December 2024 All Months January February March April May June July August September October November December 2023 All Months January February March April May June July August September October November December 2022 All Months January February March April May June July August September October November December 2021 All Months January February March April May June July August September October November December 2020 All Months January February March April May June July August September October November December 2019 All Months January February March April May June July August September October November December 2018 All Months January February March April May June July August September October November December 2017 All Months January February March April May June July August September October November December Archives 2016 All Months January February March April May June July August September October November December 2015 All Months January February March April May June July August September October November December 2014 All Months January February March April May June July August September October November December 2013 All Months January February March April May June July August September October November December 2012 All Months January February March April May June July August September October November December 2011 All Months January February March April May June July August September October November December 2010 All Months January February March April May June July August September October November December 2009 All Months January February March April May June July August September October November December 2008 All Months January February March April May June July August September October November December 2007 All Months January February March April May June July August September October November December 2006 All Months January February March April May June July August September October November December 2005 All Months January February March April May June July August September October November December 2004 All Months January February March April May June July August September October November December 2003 All Months January February March April May June July August September October November December 2002 All Months January February March April May June July August September October November December 2001 All Months January February March April May June July August September October November December 2000 All Months January February March April May June July August September October November December 1999 All Months January February March April May June July August September October November December 1998 All Months January February March April May June July August September October November December 1997 All Months January February March April May June July August September October November December 1996 All Months January February March April May June July August September October November December 1995 All Months January February March April May June July August September October November December 1994 All Months January February March April May June July August September October November December 1993 All Months January February March April May June July August September October November December 1992 All Months January February March April May June July August September October November December 1991 All Months January February March April May June July August September October November December Top Back to previous page More Links : Bank Holidays Banking Glossary Citizen's Charter Complaints Contact Us COVID-19 Measures E-LMS Events FAQs Financial Education Forms IFSC/MICR Codes Important Websites Opportunities @ RBI RBI Clarifications RBI Kehta Hai RBI’s Vision and Values (1257 kb)--> Right to Information Act Tenders Follow RBI RSS Twitter YouTube Instagram Facebook LinkedIn © Reserve Bank of India. 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Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2012-13/402 · issued 29 Jan 2013. The plain-English explanation above is BankPulse’s own independent summary.
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Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=7838&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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