RBI on 4th October 2016 has slashed Repo rate by a quarter of a percent (0.25%) . This will make loans cheaper & provides greater liquidity in the market. Now banks can borrow from RBI at 6.25%.
RBI’s policy announcements has many reasons.
- A new procedure to decide policy rates has also been adopted. An act was passed in the parliament which called for keeping the retail price inflation between 2-6 percent.
- A committee has been formed comprising of representatives from both RBI and centre which now makes the call on key policy rates of the central bank.
- It was for the first time that a six member committee took the decision to reduce the repo rate and this decision was a unanimous one.
Latest Policy Rates of the Reserve Bank of India (RBI)
Check Current Policy Rates & Reserve Ratios of Indian Banking as on 24nd October 2016:
| S. No | Rates / Reserve Ratios | % | W.e.f |
| 1 | Bank Rate | 6.75% | 4th October 2016 |
| 2 | Repo Rate | 6.25% | 4th October 2016 |
| 3 | Reverse Repo Rate | 5.75% | 4TH October 2016 |
| 4 | Cash Reserve Ratio (CRR) | 4.00% | 9th February 2013 |
| 5 | Statutory Liquidity Ratio (SLR) | 20.75% | 4th October 2016 |
| 6 | Marginal Standing Facility (MSF) | 6.75% | 4th October 2016 |