Current · Source: Reserve Bank of India · RBI/2022-2023/120 · issued 30 Sep 2022 · ~1 min read
Quick answerRBI hiked the repo rate by 50 bps to 5.90% effective September 30, 2022. SDF and MSF rates adjusted to 5.65% and 6.15% respectively. All other LAF terms unchanged.
The rule, in the simplest words
RBI raised the repo rate (the rate at which banks borrow money from RBI) by 0.50% to 5.90%, starting September 30, 2022.
The SDF rate (a facility where banks can deposit money with RBI) went up to 5.65%, and the MSF rate (an emergency borrowing rate) went up to 6.15%.
Banks now have to pay more to borrow from RBI, so they will likely charge higher interest on loans and offer higher interest on deposits.
All other rules of the LAF (the system RBI uses to manage bank liquidity) stayed the same.
How it plays out — a real example
A branch operations officer in Indore reviews the new repo rate of 5.90% and recalculates the interest on a customer's floating-rate gold loan. She updates the loan pricing model to reflect the higher cost of funds, ensuring the bank's net interest margin stays healthy while clearly explaining the rate change to the borrower.
What changed
The Monetary Policy Committee increased the policy repo rate under LAF by 50 basis points from 5.40% to 5.90%. Consequently, the SDF rate moved to 5.65% and the MSF rate to 6.15%, effective immediately.
What it means for you
Banks will face higher cost of funds from RBI as borrowing via repo becomes more expensive. Lending rates are likely to rise, impacting loan demand and net interest margins. The MSF and SDF adjustments provide clear corridors for overnight liquidity management.
What you must do
Review and adjust your bank's lending and deposit rates to reflect the new repo rate.
Reassess liquidity management strategies considering the revised SDF and MSF corridors.
Communicate rate changes to customers and update loan pricing models accordingly.
Monitor market reactions and adjust treasury operations for the new rate environment.
Who it affects
All LAF participants including scheduled commercial banks, Primary dealers, Borrowers with floating rate loans, Treasury and asset-liability management teams
❓ Common questions
Regulatory timeline
Stated effective dateeffective September 30, 2022
Decoded by BankPulse2026-06-18 05:31 IST
Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).
What is the new repo rate effective from September 30, 2022?
The repo rate has been increased by 50 basis points to 5.90% with immediate effect.
How have the SDF and MSF rates changed?
The SDF rate is now 5.65% and the MSF rate is 6.15%, both effective immediately.
Are there any other changes to the LAF scheme?
No, all other terms and conditions of the LAF scheme remain unchanged.
📜 Read the original circular — full text as issued by RBI
RBI/2022-2023/120
FMOD.MAOG.No.147/01.01.001/2022-23
September 30, 2022
All Liquidity Adjustment Facility (LAF) participants
Madam/Sir,
Liquidity Adjustment Facility- Change in rates
As announced in the Monetary Policy Statement dated September 30, 2022 , it has been decided by the Monetary Policy Committee (MPC) to increase the policy Repo rate under the Liquidity Adjustment Facility (LAF) by 50 basis points from 5.40 per cent to 5.90 per cent with immediate effect.
2. Consequently, the standing deposit facility (SDF) rate and marginal standing facility (MSF) rate stand adjusted to 5.65 per cent and 6.15 per cent respectively, with immediate effect.
3. All other terms and conditions of the extant LAF Scheme will remain unchanged.
Yours sincerely,
(G. Seshsayee)
Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2022-2023/120 · issued 30 Sep 2022. The plain-English explanation above is BankPulse’s own independent summary.
Monitor market reactions and adjust treasury operations for the new rate environment.
📜 Compliance
Review and adjust your bank's lending and deposit rates to reflect the new repo rate.
Reassess liquidity management strategies considering the revised SDF and MSF corridors.
Communicate rate changes to customers and update loan pricing models accordingly.
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 LAF participants including scheduled commercial banks, Primary dealers, Borrowers with floating rate loans, Treasury and asset-liability management teams), your first concrete step on “Repo Rate Hiked 50 bps to 5.90%: SDF & MSF Adjusted” is: “Review and adjust your bank's lending and deposit rates to reflect the new repo rate.” (RBI issued this 30 Sep 2022).
Action required: Review and adjust your bank's lending and deposit rates to reflect the new repo rate.
Action required: Reassess liquidity management strategies considering the revised SDF and MSF corridors.
Action required: Communicate rate changes to customers and update loan pricing models accordingly.
Action required: Monitor market reactions and adjust treasury operations for the new rate environment.
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=12391&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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