What changed
The repo rate under the Liquidity Adjustment Facility was reduced from 7.75% to 7.50%, a 25 basis point cut. This change immediately lowered the interest rate on standing liquidity facilities—Export Credit Refinance, Special Export Credit Refinance for scheduled banks (excluding RRBs), and collateralised liquidity support for Primary Dealers—to the revised repo rate.
What it means for you
Banks and Primary Dealers will now pay lower interest on these specific liquidity windows, reducing their cost of funds for export credit and general liquidity support. This aligns with the monetary policy easing stance and may encourage banks to utilise these facilities more actively, potentially improving credit flow to exporters.
What you must do
- Update internal systems to reflect the new 7.50% rate on ECR, SECR, and PD liquidity facilities immediately.
- Communicate the revised rate to treasury and credit teams handling export refinance and liquidity management.
- Review your bank's utilisation of standing liquidity facilities to optimise borrowing costs under the new rate.
- Monitor RBI's future policy announcements for further rate changes that may affect these facilities.
Who it affects
All Scheduled Banks (excluding Regional Rural Banks), Primary Dealers, Export credit departments of banks, Treasury desks managing liquidity
Which facilities are impacted by this repo rate cut?
The interest rates on Export Credit Refinance (ECR), Special Export Credit Refinance (SECR) for banks, and collateralised liquidity support for Primary Dealers are all reduced to the new repo rate of 7.50%.
Are Regional Rural Banks (RRBs) covered by this circular?
No, the circular explicitly excludes Regional Rural Banks from its scope. Only scheduled banks (excluding RRBs) and Primary Dealers are affected.
When did this rate change take effect?
The revised rate became effective immediately from March 19, 2013, the date of the circular.