Current RBI Rates

When the Reserve Bank of India lends short-term funds to banks against government securities, the interest charged is the Repo Rate. A rate cut makes borrowing cheaper for banks → cheaper loans for customers → demand boost. A hike does the opposite, used to cool inflation. This is the single most-discussed monetary policy variable in JAIIB Principles & Practices of Banking.

Introduced in April 2022, the Standing Deposit Facility lets banks park excess overnight funds with RBI without receiving G-Secs as collateral. It replaced the fixed Reverse Repo as the floor of the Liquidity Adjustment Facility (LAF) corridor. SDF rate = Repo − 25 bps in the current framework.

The Marginal Standing Facility is RBI's emergency overnight window. Banks can borrow up to 2% of their NDTL by dipping into their SLR holdings. MSF = Repo + 25 bps, capping the upper end of the LAF corridor.

The Bank Rate is the long-standing penal rate aligned with the MSF rate. It's used to price specific refinance lines and as a benchmark for penalties on CRR/SLR shortfalls. Modern policy transmission happens via the repo, but the Bank Rate stays relevant for legacy contracts.

The Fixed Reverse Repo Rate is largely symbolic since the SDF took over as the LAF floor in April 2022. RBI keeps it on the books for occasional fine-tuning operations but day-to-day liquidity drainage runs through SDF.

Cash Reserve Ratio is the percentage of a bank's Net Demand and Time Liabilities (NDTL) it must keep as cash balances with RBI on average over a reporting fortnight. CRR earns zero interest, so cutting CRR releases lendable liquidity into the banking system instantly. Heavily tested in JAIIB AFB & CAIIB ABM.

Statutory Liquidity Ratio is the minimum percentage of NDTL banks must hold in liquid assets (mostly government securities, plus gold and cash). Unlike CRR, SLR holdings earn returns — they cap leverage and ensure solvency. A SLR cut frees up bank capital for lending.