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MSF Rate Cut by 25 bps to 8.75%

Current · Source: Reserve Bank of India · RBI/2013-14/340 · issued 29 Oct 2013 · ~1 min read
Quick answerRBI reduced the Marginal Standing Facility rate by 25 basis points to 8.75%, effective immediately. This recalibrates MSF to 100 bps above the repo rate, easing short-term borrowing costs for banks.
The rule, in the simplest words
How it plays out — a real example

Rohit, a treasury manager at State Bank of India in Mumbai, checks the daily rates and sees the MSF is now 8.75%. He quickly updates the bank’s short‑term borrowing plan, using the cheaper overnight loan to cover a cash gap, and informs his ALM team that the cost of borrowing from the RBI has gone down.

What changed

The MSF rate was cut from 9.00% to 8.75%, a reduction of 25 basis points, effective from October 29, 2013. Consequently, the MSF rate is now set at 100 basis points above the policy repo rate under the LAF.

What it means for you

Banks can now borrow overnight from RBI at a lower cost, improving liquidity management. This reduction signals a slight easing in monetary policy, potentially lowering short-term lending rates for banks and their customers.

What you must do

Who it affects

Scheduled Commercial Banks (excluding RRBs), Treasury departments, Asset-Liability Management teams

❓ Common questions

Regulatory timeline

Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).

What is the new MSF rate and when does it take effect?

The MSF rate is reduced to 8.75% from 9.00%, effective immediately from October 29, 2013.

How does this change relate to the repo rate?

The MSF rate is now recalibrated to 100 basis points above the policy repo rate under the LAF.

Are there any other changes to the MSF scheme?

No, all other terms and conditions of the MSF scheme remain unchanged.

📜 Read the original circular — full text as issued by RBI
RBI/2013-14/340 FMD.MOAG. No. 91/01.18.001/2013-14 October 29, 2013 All Scheduled Commercial Banks (excluding RRBs) Madam / Sir, Marginal Standing Facility Rates As announced today in the Second Quarter Review of the Monetary Policy 2013-14 , it has been decided to reduce the Marginal Standing Facility (MSF) rate by 25 basis points from 9.00 percent to 8.75 per cent with immediate effect. 2. Consequent to this change, Marginal Standing Facility (MSF) rate is recalibrated to 100 basis points above the policy repo rate under the Liquidity Adjustment Facility (LAF). 3. All other terms and conditions of the current MSF Scheme will remain unchanged. Yours sincerely (G. Mahalingam) Principal Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2013-14/340 · issued 29 Oct 2013. The plain-English explanation above is BankPulse’s own independent summary.
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Who does what — compliance checklist
💻 IT / Systems
  • Update your internal systems to reflect the new MSF rate of 8.75%.
📜 Compliance
  • Review your liquidity contingency plans to leverage the lower MSF rate.
  • Communicate the rate change to your treasury and ALM teams for immediate action.
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 (Scheduled Commercial Banks (excluding RRBs), Treasury departments, Asset-Liability Management teams), your first concrete step on “MSF Rate Cut by 25 bps to 8.75%” is: “Update your internal systems to reflect the new MSF rate of 8.75%.” (RBI issued this 29 Oct 2013).

  1. Circular: RBI/2013-14/340 -- MSF Rate Cut by 25 bps to 8.75%
  2. Issued: 29 Oct 2013
  3. Action required: Update your internal systems to reflect the new MSF rate of 8.75%.
  4. Action required: Review your liquidity contingency plans to leverage the lower MSF rate.
  5. Action required: Communicate the rate change to your treasury and ALM teams for immediate action.
  6. Owner: ____________ Target date: ____________
  7. Board/committee approval needed? Y / N
  8. 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.

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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=8534&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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