What changed
- RBI reduced the policy repo rate under the Liquidity Adjustment Facility (LAF) by 50 basis points from 6.00% to 5.50%.
- Standing deposit facility (SDF) rate and marginal standing facility (MSF) rate adjusted to 5.25% and 5.75% respectively.
- All other terms and conditions of the extant LAF Scheme remain unchanged.
What it means for you
- This rate reduction is as announced in the Monetary Policy Statement dated June 06, 2025.
- Banks and lenders should note the adjusted SDF rate of 5.25% and MSF rate of 5.75%.
- All other terms and conditions of the extant LAF Scheme remain unchanged.
What you must do
- Review and update your lending and borrowing strategies accordingly.
- Monitor the impact of this rate change on your bank's liquidity and interest income.
- Consider adjusting your deposit and lending rates to remain competitive.
Who it affects
All Liquidity Adjustment Facility (LAF) participants
What is the new policy repo rate under LAF?
The new policy repo rate under LAF is 5.50%.
What is the impact of this rate change on banks and lenders?
Banks and lenders may see an increase in liquidity and a decrease in borrowing costs.
What are the other terms and conditions of the extant LAF Scheme?
All other terms and conditions of the extant LAF Scheme remain unchanged.