RBI Policy Rates as updated by resolutions of Monetary Policy Committee dt. 05 to 07.02.2025
With the help of policy rate changes, RBI manages inflation by managing the money supply in the financial system. If policy rates are reduced, it will make money available easily, and an increase in the money supply is expected to boost inflation. In the reverse situation, when policy rates are increased then money will be flushed out of the financial system and a decrease in the money supply is expected to reduce inflation.
| Policy Rates | Current Rate | Particulars |
|---|---|---|
| Repo Rate | 6.25% | Repo rate is the interest rate at which the RBI lends money to the commercial banks for a short term in the event of scarcity of funds. |
| Fixed Reverse Repo Rate | 3.35% | Reverse Repo rate is the interest rate at which commercial banks in India park their excess money with the Reserve Bank of India for a short-term period. RBI manages inflation by managing the money supply in the market using Repo and reverse repo as a tool. |
| Marginal Standing Facility (MSF) | 6.50% | Marginal Standing Facility is a new Liquidity Adjustment Facility (LAF) window created by Reserve Bank of India in its credit policy of May 2011. MSF is the rate at which the banks are able to borrow overnight funds from RBI against the approved government securities in an emergency situation when inter-bank liquidity dries up completely. Under MSF, banks can borrow funds up to 1% of their net demand and time liabilities. |
| Standing deposit facility (SDF) Rate | 6.00% | Standing deposit facility(SDF) was introduced by RBI on 08-Apr-22, SDF is a liquidity tool that gives banks an option to park access liquidity with RBI. Unlike the reverse repo facility, you don’t need to provide collateral while depositing funds with RBI. |
| Bank Rate | 6.50% | Bank rate is the rate charged by the central bank for lending funds to commercial banks.Bank rates influence the lending rates of commercial banks. |
| Cash Reserve Ratio (CRR) | 4.00% | Cash reserve Ratio (CRR) is the amount of funds that the banks have to keep with the RBI. If the central bank decides to increase the CRR, the available amount with the banks comes down. The RBI uses the CRR to drain out excessive money from the system. |
| Statutory Liquidity Ratio (SLR) | 18.00% | Statutory liquidity ratio (SLR) is the Liquidity/reserve requirement that the commercial banks in India are required to maintain in the form of cash, gold reserves, RBI approved securities before providing credit to customers. |
| CPI Inflation Rate | 4.75% (may-24) | The inflation Rate in India averaged 5.98 percent from 2012 until 2019, reaching an all-time high of 12.17 percent in November of 2013 and a record low of 1.54 percent in June of 2017. The headline inflation rate, year-on-year, is at 5.4 per cent for 2023-24. Projeced inflation for FY 24-25 is 4.8%. CPI inflation for the financial year 2025-26 is projected at 4.2 per cent. Average inflation rate of India in past seven years:- Average inflation rate of 2017= 3.33% Average inflation rate of 2018= 3.94% Average inflation rate of 2019= 3.73% Average inflation rate of 2020= 6.62% Average inflation rate of 2021= 5.13% Average inflation rate of 2022= 6.70% Average inflation rate of 2023= 5.49% |
| Base Rate | : 9.10% – 10.40% |
| MCLR (Overnight) | : 8.15% – 8.45% |
| Savings Deposit Rate | : 2.70% – 3.00% |
| Term Deposit Rate > 1 Year | : 6.00% – 7.25% |
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