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Bank Rate Cut to 8.75%: Impact on UCBs

No longer current — withdrawn, no replacement on file yet

Source: Reserve Bank of India · RBI/2012-13/404 · issued 30 Jan 2013 · ~1 min read

Quick answerRBI reduced the Bank Rate by 25 bps to 8.75% effective January 29, 2013. This lowers penal interest on reserve shortfalls and SSI refinance rate for Urban Co-operative Banks.

What changed

The Bank Rate was reduced from 9.00% to 8.75%, a 25 basis point cut, effective January 29, 2013. Penal interest rates on reserve requirement shortfalls, linked to the Bank Rate, were revised downward accordingly. The interest rate on refinance for small-scale industries under Section 17(2)(bb) read with Section 17(4)(c) of the RBI Act also dropped to 8.75%.

What it means for you

Urban Co-operative Banks will face lower penal charges for reserve shortfalls, easing liquidity-related costs. The reduced SSI refinance rate may encourage lending to small industries. This aligns with the monetary policy stance to support economic activity.

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

Update internal systems to reflect the new Bank Rate of 8.75% for penal interest calculations.
Communicate revised penal interest rates to relevant departments handling reserve maintenance.
Review SSI lending operations to leverage the lower refinance rate of 8.75%.
Acknowledge receipt of this circular to your Regional Office as instructed.

Who it affects

All Primary (Urban) Co-operative Banks, Branches handling reserve requirement compliance, SSI lending divisions within UCBs

❓ Common questions

Regulatory timeline

Stated effective date effective January 29, 2013
Decoded by BankPulse 2026-06-18 16:19 IST
repealed_by — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
Status change: withdrawn 03 Aug 2026, 04:00 IST

Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).

What is the new Bank Rate effective from January 29, 2013?

The Bank Rate has been reduced by 25 basis points from 9.00% to 8.75%.

How does this affect penal interest rates on reserve shortfalls?

Penal rates linked to the Bank Rate are revised: the lower rate (Bank Rate plus 3.0 percentage points) drops from 12.00% to 11.75%, and the higher rate (Bank Rate plus 5.0 percentage points) from 14.00% to 13.75%.

Does this circular impact SSI refinance?

Yes, the interest rate on refinance for small-scale industries under Section 17(2)(bb) read with Section 17(4)(c) of the RBI Act is now 8.75%.

📜 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 #1174: UBD.BPD.(PCB).Cir.No.35/16.11.00/2012-13 — "Bank Rate" dated January 30, 2013”

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

Notifications - Reserve Bank of India Skip to main content Selected Selected Change Language हिंदी Search the Website Search Home About Us ▼ About Us Organisation & Functions ▶ Organisation Structure Departments Offices Training Establishment ▶ College of Agricultural Banking Reserve Bank Staff College College of Supervisors RBI's Functions and Working Governors Deputy Governors Executive Directors Communication Policy of RBI Sources of Information ▶ Annual Publications Half-yearly Publications Quarterly Publications Monthly Publications Weekly Publications Occasional Publications SDDS NSDP Data Releases Publications available on Subscription General Information RBI History Museum ▶ The RBI Museum RBI Monetary Museum Notification ▼ Notifications Master Directions Master Circulars Amendment Directions Draft Notifications/Guidelines ▶ Draft Notifications/Guidelines Draft Directions (RE-wise) Index To RBI Circulars Standalone Circulars Circulars Withdrawn Press Releases Speeches & Media Interactions ▼ Speeches Media Interactions Memorial Lectures Podcasts Publications ▼ Biennial Annual Half-Yearly Quarterly Bi-monthly Monthly Weekly Occasional Reports Working Papers Legal Framework ▼ Act Rules Regulations Schemes Research ▼ External Research Schemes RBI Occasional Papers Working Papers RBI Bulletin History DRG Studies KLEMS State Statistics and Finances Statistics ▼ Data Releases Database on Indian Economy Public Debt Statistics Regulatory Reporting ▼ List of Returns Data Definition Validation rules/ Taxonomy List of RBI Reporting Portals FAQs of RBI Reporting Portals Home Notifications Notifications ( 720 kb ) UCBs – Bank Rate RBI/2012-13/404 UBD.BPD.(PCB).Cir.No. 35/16.11.00/2012-13 January 30, 2013 The Chief Executive Officer All Primary (Urban) Co-operative Banks Madam/Dear Sir, Bank Rate Please refer to our circular UBD.BPD.(PCB).Cir.No.40/16.11.00/2011-12 dated June 5, 2012 on the captioned subject. As announced in the Third Quarter Review of Monetary Policy Statement 2012-13 , the Bank Rate stands adjusted by 25 basis points from 9.00 per cent to 8.75 per cent with effect from January 29, 2013. 2. All penal interest rates on shortfall in reserve requirements, which are specifically linked to the Bank Rate, also stand revised as indicated in Annex . The interest rate on refinance for SSI under Section 17(2)(bb) read with Section 17(4)(c) of the Reserve Bank of India Act, 1934 also stands revised to 8.75 per cent with effect from January 29, 2013. 3. Please acknowledge the receipt to the Regional Office concerned. Yours faithfully, (A.Udgata) Chief General Manager-in-Charge 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 &copy; Reserve Bank of India. 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Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2012-13/404 · issued 30 Jan 2013. The plain-English explanation above is BankPulse’s own independent summary.

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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=7840&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.