Bank Rate Cut to 8.75%: Impact on RRBs and Co-op Banks
No longer current — withdrawn, no replacement on file yet
Source: Reserve Bank of India · RBI/2013-14/348 · issued 30 Oct 2013 · ~2 min read
Quick answerRBI cut the Bank Rate by 25 bps to 8.75% effective October 29, 2013. This directly lowers penal interest rates on reserve shortfalls for RRBs and co-operative banks, reducing their cost of non-compliance with CRR/SLR requirements.
What changed
The Bank Rate was reduced from 9.0% to 8.75%, a 25 basis point cut, effective October 29, 2013. Consequently, all penal interest rates linked to the Bank Rate—specifically those on shortfalls in reserve requirements—were revised downward by 25 bps. For example, the penal rate of Bank Rate plus 3 percentage points fell from 12.00% to 11.75%, and the rate of Bank Rate plus 5 percentage points fell from 14.00% to 13.75%.
What it means for you
For RRBs and co-operative banks, this reduces the financial penalty for failing to meet reserve requirements (CRR/SLR). Lower penal rates ease liquidity pressure and reduce the cost of inadvertent shortfalls. Banks should update their internal systems and communicate the revised rates to relevant departments to ensure accurate calculation of penalties.
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 manuals to reflect the new Bank Rate of 8.75% and revised penal interest rates.
Communicate the revised penal rates to treasury, compliance, and operations teams handling reserve maintenance.
Ensure that any penal interest charged on shortfalls from October 29, 2013 onward uses the new rates.
Acknowledge receipt of this circular to your respective RBI Regional Office.
Who it affects
All Regional Rural Banks (RRBs), State and Central Co-operative Banks
❓ Common questions
Regulatory timeline
Stated effective dateeffective October 29, 2013
Decoded by BankPulse2026-06-18 12:02 IST
repealed_by — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
Status change: withdrawn03 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 effective date of the Bank Rate change?
The Bank Rate was reduced to 8.75% with effect from October 29, 2013, as announced in the Second Quarter Review of Monetary Policy 2013-14.
Which penal rates are affected by this change?
Penal interest rates on shortfalls in reserve requirements that are linked to the Bank Rate. The two tiers are: Bank Rate plus 3 percentage points (now 11.75%) and Bank Rate plus 5 percentage points (now 13.75%).
Do we need to take any action to acknowledge this circular?
Yes, the circular instructs you to acknowledge receipt to your respective RBI Regional Office.
📜 This document’s life story (1 recorded event, each backed by RBI’s own words)
Repealed byRBI/2025-26/100 — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2013-14/348 · issued 30 Oct 2013. The plain-English explanation above is BankPulse’s own independent summary.
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=8542&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.
Help us keep this accurate
Found an inaccuracy or have an improvement? Tell us. Every report is reviewed by our team before any change is made — nothing goes live unverified.
Public beta — plain-English informational summaries. Always verify against the official RBI source (circular number cited on every page) before making compliance, credit, treasury, audit, or operational decisions. · Join our WhatsApp channel ↗
BANKPULSE · FREE DAILY BRIEF
Get RBI updates for your role
Every important RBI update, decoded in plain English — for your career, exams & financial awareness.
We collect only your email, name and role, used solely to send your brief — never sold or shared. Withdraw anytime via the unsubscribe link in any email. Independent platform, not affiliated with the RBI. Information, not legal advice.
REPORT AN ERROR · BETA
Spotted an error? Earn 500 BankPulse Credits
Help us stay accurate. If your correction is verified true and approved by our founder, you earn 500 BankPulse Credits — redeemable when the platform monetises.
Reviewed by a human before any credit is awarded. We never change the site from crowd input without verification.
WANT A NEW FEATURE · BETA
What would make BankPulse more useful for you?
Tell us what to build next — a tool, a data view, a role page, anything. We read every suggestion.
Thank you — your ideas directly shape what we build.