• The Reserve Bank of India has decided to increase the bank rate to 9.5 per cent with immediate effect. RBI said in a notification that this increase should be viewed and understood as one-time technical adjustment to align the Bank Rate with the marginal standing facility (MSF) rate rather than a change in the monetary policy stance.
  • The Bank Rate, which is the standard rate at which the RBI buys or re-discounts bills of exchange or other commercial paper, is presently used as a penal rate, which the banks have to pay for their failure to meet the mandatory Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR).
  • The Bank Rate, which has been increased to 9.50 per cent, was kept unchanged since April 2003.