Repo Rate Cut by 25 bps to 7.75% in Q3 Policy Review
Current · Source: Reserve Bank of India · RBI/2012-2013/398 · issued 29 Jan 2013 · ~1 min read
Quick answerRBI cut the repo rate by 25 bps to 7.75% effective immediately. Reverse repo and MSF rates adjusted to 6.75% and 8.75% respectively. All other LAF and MSF terms unchanged.
The rule, in the simplest words
The RBI cut the repo rate by 25 basis points to 7.75% with immediate effect.
The reverse repo rate automatically adjusted to 6.75% and the MSF rate to 8.75%.
All other terms of LAF and MSF schemes remain unchanged.
How it plays out — a real example
A branch operations officer in Indore, Mr. Kumar, can now borrow from RBI at a lower cost. This means he can offer lower interest rates to his customers, making it easier for them to borrow money to buy gold. As a result, Mr. Kumar's customers are likely to increase their gold purchases, which can boost the local economy.
What changed
The repo rate under LAF was reduced by 25 basis points from 8.00% to 7.75% with immediate effect. Consequently, the reverse repo rate automatically adjusted to 6.75% and the MSF rate to 8.75%. All other terms of LAF and MSF schemes remain unchanged.
What it means for you
Banks can now borrow from RBI at a lower cost, which may reduce their lending rates over time. The 25 bps cut signals RBI's intent to support growth while keeping liquidity conditions stable. Lenders should reassess their marginal cost of funds and loan pricing strategies.
What you must do
Update your treasury systems and internal lending rate benchmarks to reflect the new repo rate of 7.75%.
Communicate the rate change to your asset-liability management (ALM) team for impact on NIMs.
Review your loan pricing models and consider passing on the benefit to borrowers to boost credit demand.
Ensure compliance with revised reverse repo and MSF rates for daily liquidity management.
Who it affects
All scheduled commercial banks (excluding RRBs), Primary dealers, Treasury and ALM departments, Retail and corporate loan customers
❓ Common questions
When did this repo rate cut take effect?
The cut was effective immediately from January 29, 2013, as announced in the Third Quarter Review of Monetary Policy 2012-13.
What are the new reverse repo and MSF rates?
The reverse repo rate is now 6.75% and the MSF rate is 8.75%, both adjusted automatically due to the repo rate change.
Are any other terms of LAF or MSF changing?
No, all other terms and conditions of the current LAF and MSF schemes remain unchanged.
📜 Read the original circular — full text as issued by RBI
RBI/2012-2013/398
FMD.MOAG. No.74/01.01.001/2012-13
January 29, 2013
All Scheduled Commercial Banks (excluding RRBs) and Primary Dealers
Dear Sir,
Liquidity Adjustment Facility – Repo and Reverse Repo
and Marginal Standing Facility Rates
As announced today by the Governor in the Third Quarter Review of the Monetary Policy 2012-13 , it has been decided to reduce the Repo rate under the Liquidity Adjustment Facility (LAF) by 25 basis points from 8.00 per cent to 7.75 per cent with immediate effect.
2. Consequent to the change in the Repo rate, the Reverse Repo rate under the LAF and the Marginal Standing Facility (MSF) rate will stand automatically adjusted to 6.75 per cent and 8.75 per cent respectively with immediate effect.
3. All other terms and conditions of the current LAF and MSF Schemes will remain unchanged.
4. Please acknowledge receipt.
Yours sincerely
(G. Mahalingam)
Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2012-2013/398 · issued 29 Jan 2013. The plain-English explanation above is BankPulse’s own independent summary.
Update your treasury systems and internal lending rate benchmarks to reflect the new repo rate of 7.75%.
📜 Compliance
Communicate the rate change to your asset-liability management (ALM) team for impact on NIMs.
Review your loan pricing models and consider passing on the benefit to borrowers to boost credit demand.
Ensure compliance with revised reverse repo and MSF rates for daily liquidity management.
Grouped from the action items above — a single circular may involve more than one team.
Worked example & action-note template
Example: if you are an IT/Systems lead at a bank this circular applies to (All scheduled commercial banks (excluding RRBs), Primary dealers, Treasury and ALM departments, Retail and corporate loan customers), your first concrete step on “Repo Rate Cut by 25 bps to 7.75% in Q3 Policy Review” is: “Update your treasury systems and internal lending rate benchmarks to reflect the new repo rate of 7.75%.” (RBI issued this 29 Jan 2013).
Circular: RBI/2012-2013/398 -- Repo Rate Cut by 25 bps to 7.75% in Q3 Policy Review
Issued: 29 Jan 2013
Action required: Update your treasury systems and internal lending rate benchmarks to reflect the new repo rate of 7.75%.
Action required: Communicate the rate change to your asset-liability management (ALM) team for impact on NIMs.
Action required: Review your loan pricing models and consider passing on the benefit to borrowers to boost credit demand.
Action required: Ensure compliance with revised reverse repo and MSF rates for daily liquidity management.
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.
💬 Banker Discussion
Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.
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=7834&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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