Current · Source: Reserve Bank of India · RBI/2013-14/339 · issued 29 Oct 2013 · ~1 min read
Quick answerRBI raised the repo rate by 25 bps to 7.75% effective immediately, as announced in the Second Quarter Review of Monetary Policy 2013-14. The reverse repo rate automatically adjusted to 6.75%. All other LAF terms remain unchanged.
The rule, in the simplest words
The RBI increased the repo rate by 25 basis points to 7.75% to control inflation.
Banks may pass on higher costs to customers through increased lending rates.
The reverse repo rate automatically adjusted to 7.75% minus 25 basis points, which is 6.75%.
How it plays out — a real example
A branch operations officer in Indore, Mr. Kumar, noticed that the RBI raised the repo rate. He knew this would increase the cost of borrowing for his bank, so he decided to review the lending rates for gold loans to ensure they were competitive. He also communicated the rate change to his treasury team to plan for the impact on liquidity.
What changed
The repo rate under the Liquidity Adjustment Facility (LAF) was increased by 25 basis points from 7.50% to 7.75%, effective immediately. Consequently, the reverse repo rate automatically adjusted to 6.75%.
What it means for you
This rate hike signals tighter monetary policy to control inflation, increasing the cost of funds for banks borrowing from RBI. Banks may pass on higher costs to customers through increased lending rates, potentially slowing credit demand. The automatic reverse repo adjustment maintains the corridor spread.
What you must do
Review your bank's lending and deposit rate pricing to reflect the higher repo rate.
Communicate the rate change impact to treasury and ALM teams for liquidity planning.
Assess the effect on your bank's net interest margin and loan portfolio repricing.
Update internal systems and customer communications for any rate-linked products.
Who it affects
All Scheduled Commercial Banks (excluding RRBs), Standalone Primary Dealers, Treasury and ALM departments, Borrowers with floating rate loans
❓ Common questions
When did this repo rate hike take effect?
The hike was effective immediately from October 29, 2013, as announced in the Second Quarter Review of Monetary Policy 2013-14.
What is the new reverse repo rate after this change?
The reverse repo rate automatically adjusted to 6.75% following the repo rate increase to 7.75%.
Did any other terms of the LAF change?
No, all other terms and conditions of the current LAF scheme remained unchanged.
📜 Read the original circular — full text as issued by RBI
RBI/2013-14/339
FMD.MOAG. No. 90/01.01.001/2013-14
October 29, 2013
All Scheduled Commercial Banks (excluding RRBs) and Standalone Primary Dealers
Madam / Sir,
Liquidity Adjustment Facility – Repo and Reverse Repo Rates
As announced today in the Second Quarter Review of the Monetary Policy 2013-14 , it has been decided to increase the Repo rate under the Liquidity Adjustment Facility (LAF) by 25 basis points from 7.50 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 will stand automatically adjusted to 6.75 per cent with immediate effect.
3. All other terms and conditions of the current LAF scheme will remain unchanged.
Yours sincerely
(G. Mahalingam)
Principal Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2013-14/339 · issued 29 Oct 2013. The plain-English explanation above is BankPulse’s own independent summary.
Update internal systems and customer communications for any rate-linked products.
📜 Compliance
Review your bank's lending and deposit rate pricing to reflect the higher repo rate.
Communicate the rate change impact to treasury and ALM teams for liquidity planning.
Assess the effect on your bank's net interest margin and loan portfolio repricing.
Grouped from the action items above — a single circular may involve more than one team.
Worked example & action-note template
Example: if you are a Compliance officer at a bank this circular applies to (All Scheduled Commercial Banks (excluding RRBs), Standalone Primary Dealers, Treasury and ALM departments, Borrowers with floating rate loans), your first concrete step on “Repo Rate Hiked 25 bps to 7.75% in Oct 2013” is: “Review your bank's lending and deposit rate pricing to reflect the higher repo rate.” (RBI issued this 29 Oct 2013).
Circular: RBI/2013-14/339 -- Repo Rate Hiked 25 bps to 7.75% in Oct 2013
Issued: 29 Oct 2013
Action required: Review your bank's lending and deposit rate pricing to reflect the higher repo rate.
Action required: Communicate the rate change impact to treasury and ALM teams for liquidity planning.
Action required: Assess the effect on your bank's net interest margin and loan portfolio repricing.
Action required: Update internal systems and customer communications for any rate-linked products.
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=8533&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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