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Repo Rate Cut by 25 bps to 6.25%

Current · Source: Reserve Bank of India · RBI/2024-25/109 · issued 07 Feb 2025 · ~1 min read
Quick answerRBI cut the repo rate by 25 bps to 6.25% effective February 7, 2025. SDF and MSF rates adjusted to 6.00% and 6.50% respectively. All other LAF terms unchanged.
The rule, in the simplest words
How it plays out — a real example

A branch operations officer in Indore sees the repo rate cut and tells her branch manager, 'Our bank's borrowing cost from RBI just dropped by 0.25%. We can now offer lower interest rates on new gold loans to attract more customers, while keeping our profit margins healthy.' She updates the loan pricing sheet the same day.

What changed

The Monetary Policy Committee reduced the policy repo rate under the Liquidity Adjustment Facility by 25 basis points from 6.50% to 6.25%, effective immediately. Consequently, the standing deposit facility rate now stands at 6.00% and the marginal standing facility rate at 6.50%.

What it means for you

Banks can now borrow from RBI at a lower repo rate, reducing their cost of funds. This may lead to lower lending rates for borrowers, potentially boosting credit demand. The SDF and MSF rate adjustments ensure the rate corridor remains aligned with the new repo rate.

What you must do

Who it affects

All LAF participants including banks and primary dealers, Treasury and asset-liability management teams, Borrowers with floating rate loans linked to repo rate

❓ Common questions

Regulatory timeline

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

When did this repo rate cut take effect?

The rate cut is effective from February 7, 2025, as announced in the Monetary Policy Statement.

What are the new SDF and MSF rates?

The SDF rate is now 6.00% and the MSF rate is 6.50%, adjusted in line with the repo rate reduction.

Are any other LAF terms changing?

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

📜 Read the original circular — full text as issued by RBI
RBI/2024-25/109 FMOD.MAOG.No.150/01.01.001/2024-25 February 07, 2025 All Liquidity Adjustment Facility (LAF) participants Madam/Sir, Liquidity Adjustment Facility - Change in rates As announced in the Monetary Policy Statement dated February 07, 2025 , it has been decided by the Monetary Policy Committee (MPC) to reduce the policy repo rate under the Liquidity Adjustment Facility (LAF) by 25 basis points from 6.50 per cent to 6.25 per cent with immediate effect. 2. Consequently, the standing deposit facility (SDF) rate and marginal standing facility (MSF) rate stand adjusted to 6.00 per cent and 6.50 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/2024-25/109 · issued 07 Feb 2025. The plain-English explanation above is BankPulse’s own independent summary.
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Who does what — compliance checklist
💻 IT / Systems
  • Update internal systems and reporting for the revised SDF and MSF rates.
📜 Compliance
  • Review and adjust your bank's lending and deposit rates in line with the new repo rate.
  • Communicate the rate change to treasury and ALCO teams for liquidity management.
  • Assess impact on net interest margins and loan pricing strategies.
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 banks and primary dealers, Treasury and asset-liability management teams, Borrowers with floating rate loans linked to repo rate), your first concrete step on “Repo Rate Cut by 25 bps to 6.25%” is: “Review and adjust your bank's lending and deposit rates in line with the new repo rate.” (RBI issued this 07 Feb 2025).

  1. Circular: RBI/2024-25/109 -- Repo Rate Cut by 25 bps to 6.25%
  2. Issued: 07 Feb 2025
  3. Action required: Review and adjust your bank's lending and deposit rates in line with the new repo rate.
  4. Action required: Communicate the rate change to treasury and ALCO teams for liquidity management.
  5. Action required: Assess impact on net interest margins and loan pricing strategies.
  6. Action required: Update internal systems and reporting for the revised SDF and MSF rates.
  7. Owner: ____________ Target date: ____________
  8. Board/committee approval needed? Y / N
  9. 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=12774&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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