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Master Circular on Interest Rates on Advances (2013)

No longer current — withdrawn, no replacement on file yet

Source: Reserve Bank of India · RBI/2013-14/73 · issued 01 Jul 2013 · ~1 min read

Quick answerRBI consolidated all guidelines on interest rates for advances into a single master circular, effective July 1, 2013. It covers base rate, floating rates, penal interest, and more. Banks must align their lending rate policies with this circular.

What changed

RBI issued a new master circular updating the previous one from July 2, 2012, by incorporating all instructions issued up to June 30, 2013. The circular consolidates existing directives on interest rates on advances, including base rate methodology, floating rate loans, penal interest, and other related guidelines.

What it means for you

Banks must ensure their lending rate policies comply with the updated master circular, which serves as a single reference for all interest rate directives. This reduces ambiguity and helps standardize practices across scheduled commercial banks. Non-compliance could lead to regulatory scrutiny.

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

Review your bank's current lending rate policies against the master circular to ensure full compliance.
Update loan documentation to include enabling clauses for interest rate changes as specified.
Train staff on the base rate computation methodology and floating rate loan guidelines.
Monitor any penal interest charges to ensure they are reasonable and not excessive.

Who it affects

All scheduled commercial banks (excluding RRBs), Loan operations and credit departments, Risk management and compliance teams

❓ Common questions

Regulatory timeline

Stated effective date effective July 1, 2013
Decoded by BankPulse 2026-06-18 14:43 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Status change: withdrawn 03 Aug 2026, 04:00 IST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).

Does this master circular change any existing interest rate rules?

No, it consolidates and updates existing instructions issued up to June 30, 2013, without introducing new rules. Banks should refer to this circular for all current guidelines.

Are Regional Rural Banks covered by this circular?

No, the circular explicitly excludes Regional Rural Banks (RRBs). It applies only to all other scheduled commercial banks.

What is the base rate and how is it computed?

The base rate is the minimum lending rate below which banks cannot lend, except as permitted. The circular provides an illustrative methodology for its computation in Annex 1.

📜 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 #1098: DBOD.No.Dir.BC.15/13.03.00/2013-14 — "Master Circular - Interest Rates on Advances" dated July 1, 2013”

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

RBI/2013-14/73
 DBOD.No.Dir.BC.  15 /13.03.00/2013-14
 July 1, 2013
 Ashadha  10, 1935 (Saka)
 All Scheduled Commercial Banks
 (excluding RRBs)
 Dear Sir / Madam
 Master Circular - Interest Rates on Advances
 Please refer to the Master Circular DBOD.No.Dir.BC.5/13.03.00/2012-13 dated July 2, 2012 consolidating instructions / guidelines issued to banks till June 30, 2012 on matters relating to Interest Rates on Advances. The Master Circular has been suitably updated by incorporating instructions issued up to June 30, 2013 and has also been placed on the RBI website ( http://www.rbi.org.in ). A copy of the Master Circular is enclosed.
 Yours faithfully
 (Prakash Chandra Sahoo)
 Chief General Manager
 Encl: as above
 MASTER CIRCULAR ON INTEREST RATES ON ADVANCES
 CONTENTS 
 Para No.

Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2013-14/73 · issued 01 Jul 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=8119&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.