Home › Circulars › RBI/2012-13/451

Bank Rate Cut to 8.50% for Urban Co-op Banks

No longer current — withdrawn, no replacement on file yet

Source: Reserve Bank of India · RBI/2012-13/451 · issued 19 Mar 2013 · ~2 min read

Quick answerRBI reduced the Bank Rate by 25 bps to 8.50% for Primary (Urban) Co-operative Banks effective March 19, 2013. Penal interest rates on reserve shortfalls and SSI refinance rate are also revised downward accordingly.

What changed

The Bank Rate for UCBs was reduced from 8.75% to 8.50%, a 25 basis point cut, effective March 19, 2013. Penal interest rates on reserve requirement shortfalls, linked to the Bank Rate, were revised: the existing rates of Bank Rate plus 3% (11.75%) and plus 5% (13.75%) became 11.50% and 13.50% respectively. The interest rate on refinance for SSI under Section 17(2)(bb) read with 17(4)(c) of the RBI Act also dropped to 8.50%.

What it means for you

Urban co-operative banks will face lower penal charges for reserve shortfalls, easing compliance costs. The reduced Bank Rate signals a slightly accommodative monetary stance, potentially lowering borrowing costs for UCBs accessing SSI refinance. Banks should update their systems to reflect the new penal rates and refinance rate immediately.

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 and loan pricing models to reflect the new Bank Rate of 8.50%.
Revise penal interest rate calculations for reserve shortfalls to 11.50% and 13.50% as applicable.
Adjust the interest rate on SSI refinance availed under Section 17(2)(bb) to 8.50%.
Acknowledge receipt of this circular to the respective Regional Office of RBI.

Who it affects

All Primary (Urban) Co-operative Banks, Banks availing SSI refinance under Section 17(2)(bb), Banks with reserve requirement shortfalls

❓ Common questions

Regulatory timeline

Stated effective date effective March 19, 2013
Decoded by BankPulse 2026-06-18 16:02 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Status change: withdrawn 03 Aug 2026, 04:00 IST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 for UCBs effective March 19, 2013?

The Bank Rate has been reduced by 25 basis points from 8.75% to 8.50%.

How are penal interest rates on reserve shortfalls affected?

Penal rates, which are Bank Rate plus 3% or 5%, have been revised to 11.50% and 13.50% respectively, down from 11.75% and 13.75%.

Does this circular affect SSI refinance rates?

Yes, the interest rate on refinance for SSI under Section 17(2)(bb) read with 17(4)(c) of the RBI Act has been revised to 8.50%.

📜 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 #1165: UBD.BPD.(PCB).Cir.No.44/16.11.00/2012-13 — "Bank Rate" dated March 19, 2013”

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

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As announced in the Mid-Quarter Review of Monetary Policy 2012-13, the Bank Rate stands adjusted by 25 basis points from 8.75 per cent to 8.50 per cent with effect from March 19, 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 8.50 per cent with effect from March 19, 2013. 3. Please acknowledge 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 March 19, 2013) Penal interest rates on shortfalls in reserve requirements (depending on duration of shortfalls). Bank Rate plus 3.0 percentage points (11.75 per cent) or Bank Rate plus 5.0 percentage points (13.75 per cent). 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Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2012-13/451 · issued 19 Mar 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=7902&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.