Home › Circulars › RBI/2012-13/407

Bank Rate Cut to 8.75%: Impact on RRBs and Co-op Banks

No longer current — withdrawn, no replacement on file yet

Source: Reserve Bank of India · RBI/2012-13/407 · issued 29 Jan 2013 · ~1 min read

Quick answerRBI cut the Bank Rate by 25 bps to 8.75% effective January 29, 2013. This directly lowers penal interest rates on reserve shortfalls for RRBs and StCBs, reducing penalty costs for liquidity mismatches.

What changed

The Bank Rate was reduced from 9.00% to 8.75%, a 25 basis point cut, effective January 29, 2013. Consequently, penal interest rates on reserve requirement shortfalls—which are linked to the Bank Rate—also decreased: the lower tier fell from 12.00% to 11.75%, and the upper tier from 14.00% to 13.75%.

What it means for you

For RRBs and cooperative banks, this reduces the cost of penalties for failing to maintain required reserves, easing liquidity pressure. Lower penal rates can improve net interest margins for banks that occasionally face shortfalls, but the cut is modest and does not change the core reserve discipline expected.

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 calculating penal interest on reserve shortfalls.
Communicate the revised penal rates (11.75% and 13.75%) to treasury and compliance teams immediately.
Review liquidity management practices to minimize shortfalls and avoid even the reduced penalties.
Acknowledge receipt of the circular to RBI as instructed.

Who it affects

All Regional Rural Banks (RRBs), State and Central Cooperative Banks (StCBs/CCBs), Treasury and compliance departments of these banks

❓ 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Status change: withdrawn 03 Aug 2026, 04:00 IST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 do the penal interest rates on reserve shortfalls change?

The lower penal rate drops from 12.00% to 11.75%, and the upper penal rate drops from 14.00% to 13.75%, both effective January 29, 2013.

Does this circular affect any other rates or policies?

No, this circular only adjusts the Bank Rate and the linked penal interest rates on reserve requirement shortfalls. No other policy changes are included.

📜 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 #1179: RPCD.CO.RRB.RCB.BC.No.62/03.05.33/2012-13 — "Bank Rate" dated January 29, 2013”

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

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No.62/03.05.33/2012-13 January 29, 2013 The Chairmen/Chief Executive Officers, All Regional Rural Banks / State and Central Co-operative Banks Dear Sir, Bank Rate As announced in the Third Quarter Review of Monetary Policy 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 . 3. Please acknowledge receipt. Yours faithfully (C. D. Srinivasan) 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 &copy; Reserve Bank of India. 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Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2012-13/407 · issued 29 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=7843&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.