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Penal Interest on CRR/SLR Shortfall Revised After Bank Rate Cut

No longer current — withdrawn, no replacement on file yet

Source: Reserve Bank of India · RBI/2025-26/23 · issued 09 Apr 2025 · ~2 min read

Quick answerRBI cut the Bank Rate by 25 bps to 6.25% on April 9, 2025. Penal interest rates on CRR and SLR shortfalls linked to Bank Rate have dropped: the lower tier is now 9.25% and the higher tier is 11.25%, effective immediately.

What changed

The Bank Rate was reduced by 25 basis points from 6.50% to 6.25% as part of the April 2025 monetary policy. Consequently, penal interest rates on CRR and SLR shortfalls that are tied to the Bank Rate have been lowered: the rate for shorter-duration shortfalls fell from 9.50% to 9.25%, and for longer-duration shortfalls from 11.50% to 11.25%.

What it means for you

Banks will now pay slightly lower penalties if they fail to meet CRR or SLR requirements, reducing the cost of reserve shortfalls. This aligns with the broader easing stance and may marginally improve liquidity management flexibility for lenders. However, the penalty structure remains a strong deterrent, so banks should continue to maintain compliance.

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 your treasury and compliance systems to reflect the new penal rates: 9.25% and 11.25%.
Brief your ALCO and risk teams on the revised penalty structure for reserve shortfalls.
Reassess liquidity buffers to avoid shortfalls, as penalties remain significant despite the cut.
Monitor RBI circulars for any further changes to reserve requirement penalties.

Who it affects

All scheduled commercial banks, Treasury and ALM teams, Compliance and risk management departments

❓ Common questions

Regulatory timeline

Decoded by BankPulse 2026-06-18 02:02 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Status change: withdrawn 03 Aug 2026, 04:00 IST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).

What is the new Bank Rate effective April 9, 2025?

The Bank Rate has been reduced by 25 basis points from 6.50% to 6.25% with immediate effect.

How are the penal interest rates on CRR/SLR shortfalls calculated now?

For shorter-duration shortfalls, the rate is Bank Rate plus 3 percentage points (9.25%). For longer-duration shortfalls, it is Bank Rate plus 5 percentage points (11.25%).

Do these changes apply to all banks?

Yes, the circular is addressed to all banks and applies to all penal interest rates on CRR and SLR shortfalls that are linked to the Bank Rate.

📜 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 #50: DoR.RET.REC.16/12.01.001/2025-26 — "Penal Interest on Shortfall in CRR and SLR Requirements - Change in Bank Rate" dated April 9, 2025”

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

Notifications - Reserve Bank of India Skip to main content Selected Selected Change Language हिंदी Search the Website Search Home About Us ▼ About Us Organisation & Functions ▶ Organisation Structure Departments Offices Training Establishment ▶ College of Agricultural Banking Reserve Bank Staff College College of Supervisors RBI's Functions and Working Governors Deputy Governors Executive Directors Communication Policy of RBI Sources of Information ▶ Annual Publications Half-yearly Publications Quarterly Publications Monthly Publications Weekly Publications Occasional Publications SDDS NSDP Data Releases Publications available on Subscription General Information RBI History Museum ▶ The RBI Museum RBI Monetary Museum Notification ▼ Notifications Master Directions Master Circulars Amendment Directions Draft Notifications/Guidelines ▶ Draft Notifications/Guidelines Draft Directions (RE-wise) Index To RBI Circulars Standalone Circulars Circulars Withdrawn Press Releases Speeches & Media Interactions ▼ Speeches Media Interactions Memorial Lectures Podcasts Publications ▼ Biennial Annual Half-Yearly Quarterly Bi-monthly Monthly Weekly Occasional Reports Working Papers Legal Framework ▼ Act Rules Regulations Schemes Research ▼ External Research Schemes RBI Occasional Papers Working Papers RBI Bulletin History DRG Studies KLEMS State Statistics and Finances Statistics ▼ Data Releases Database on Indian Economy Public Debt Statistics Regulatory Reporting ▼ List of Returns Data Definition Validation rules/ Taxonomy List of RBI Reporting Portals FAQs of RBI Reporting Portals Home Notifications Notifications ( 864 kb ) Penal Interest on shortfall in CRR and SLR requirements-Change in Bank Rate RBI/2025-26/23 DoR.RET.REC.16/12.01.001/2025-26 April 09, 2025 All banks, Madam / Sir, Penal Interest on shortfall in CRR and SLR requirements-Change in Bank Rate Please refer to Chapter VIII of Master Direction - Reserve Bank of India [Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR)] Directions – 2021 as well as our circular DoR.RET.REC.57/12.01.001/2024-25 dated February 07, 2025 on the captioned subject. 2. As announced in the Monetary Policy Statement 2025-26 dated April 09, 2025 , the Bank Rate is revised downwards by 25 basis points from 6.50 per cent to 6.25 per cent with immediate effect. Accordingly, all penal interest rates on shortfall in CRR and SLR requirements, which are specifically linked to the Bank Rate, also stand revised as under: Penal Interest Rates which are linked to the Bank Rate Item Existing Rate Revised Rate (With immediate effect) Penal interest rates on shortfalls in reserve requirements (depending on duration of shortfall). Bank Rate plus 3.0 percentage points (9.50 per cent) or Bank Rate plus 5.0 percentage points (11.50 per cent). Bank Rate plus 3.0 percentage points (9.25 per cent) or Bank Rate plus 5.0 percentage points (11.25 per cent). Yours faithfully, (Latha Vishwanath) Chief General Manager 2026 All Months January February March April May June July August September October November December 2025 All Months January February March April May June July August September October November December 2024 All Months January February March April May June July August September October November December 2023 All Months January February March April May June July August September October November December 2022 All Months January February March April May June July August September October November December 2021 All Months January February March April May June July August September October November December 2020 All Months January February March April May June July August September October November December 2019 All Months January February March April May June July August September October November December 2018 All Months January February March April May June July August September October November December 2017 All Months January February March April May June July August September October November December Archives 2016 All Months January February March April May June July August September October November December 2015 All Months January February March April May June July August September October November December 2014 All Months January February March April May June July August September October November December 2013 All Months January February March April May June July August September October November December 2012 All Months January February March April May June July August September October November December 2011 All Months January February March April May June July August September October November December 2010 All Months January February March April May June July August September October November December 2009 All Months January February March April May June July August September October November December 2008 All Months January February March April May June July August September October November December 2007 All Months January February March April May June July August September October November December 2006 All Months January February March April May June July August September October November December 2005 All Months January February March April May June July August September October November December 2004 All Months January February March April May June July August September October November December 2003 All Months January February March April May June July August September October November December 2002 All Months January February March April May June July August September October November December 2001 All Months January February March April May June July August September October November December 2000 All Months January February March April May June July August September October November December 1999 All Months January February March April May June July August September October November December 1998 All Months January February March April May June July August September October November December 1997 All Months January February March April May June July August September October November December 1996 All Months January February March April May June July August September October November December 1995 All Months January February March April May June July August September October November December 1994 All Months January February March April May June July August September October November December 1993 All Months January February March April May June July August September October November December 1992 All Months January February March April May June July August September October November December 1991 All Months January February March April May June July August September October November December Top Back to previous page More Links Bank Holidays Banking Glossary Citizen's Charter Complaints Contact Us COVID-19 Measures E-LMS Events FAQs Financial Education Forms IFSC/MICR Codes Important Websites Opportunities @ RBI RBI Clarifications RBI Kehta Hai RBI’s Vision and Values (1257 kb)--> Right to Information Act Tenders Follow RBI RSS Twitter YouTube Instagram Facebook LinkedIn &copy; Reserve Bank of India. 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Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2025-26/23 · issued 09 Apr 2025. 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=12832&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.