RBI cuts borrowing rate for banks by 75 bps

RBI cuts borrowing rate for banks by 75 bps
Tamil NewsToday, 05:30

The Reserve Bank of India (RBI) has reduced the marginal standing facility (MSF) rate by 75 basis points from 10.25 per cent to 9.5 per cent with immediate effect.
It also decided to reduce the minimum daily maintenance of the cash reserve ratio (CRR) from 99 per cent of the requirement to 95 per cent effective from the fortnight beginning September 21.

It has, however, kept cash reserve ratio (CRR) unchanged at 4.0 per cent.

It has also increased the repo rate under the liquidity adjustment facility (LAF) by 25 basis points from 7.25 per cent to 7.5 per cent with immediate effect.

Consequently, the reverse repo rate under the LAF stands adjusted to 6.5 per cent, and the bank rate stands reduced to 9.5 per cent with immediate effect.

With these changes, the MSF rate and the bank rate are re-calibrated to 200 basis points above the repo rate.

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