The Reserve Bank of India (RBI) has announced several key policy changes following its Monetary Policy Committee meeting. Effective immediately, the policy repo rate has been reduced by 50 basis points to 5.50 percent. Concurrently, the standing deposit facility (SDF) rate is now 5.25 percent, and the marginal standing facility (MSF) rate and Bank Rate are set at 5.75 percent. Furthermore, the Cash Reserve Ratio (CRR) for all banks will be reduced by 100 basis points in four equal tranches of 25 basis points each. This phased reduction will bring the CRR to 3.0 percent of Net Demand and Time Liabilities (NDTL) by November 29, 2025, starting from September 6, 2025. Penal interest rates for CRR and SLR shortfalls, linked to the Bank Rate, have also been revised downwards. Additionally, the qualifying assets criteria for Non-Banking Financial Companies – Microfinance Institutions (NBFC-MFIs) have been updated, now requiring a minimum of 60 percent of total assets (netted off by intangibles) to be microfinance loans. These measures aim to inject liquidity, support economic growth, and ensure financial stability.
RESERVE BANK OF INDIA
RBI/2025-26/46
DoR.RET.REC.23/12.01.001/2025-26
June 06, 2025
All banks,
Madam / Sir,
Maintenance of Cash Reserve Ratio (CRR)
Please refer to our circular DoR.RET.REC.52/12.01.001/2024-25 dated December 06, 2024 and relative notification on the captioned subject.
2. As announced in the Governor’s Statement dated June 06, 2025, it has been decided to reduce the Cash Reserve Ratio (CRR) of all banks by 100 basis points in four equal tranches of 25 basis points each to 3.0 per cent of net demand and time Liabilities (NDTL). Accordingly, banks are required to maintain the CRR at 3.75 per cent, 3.5 per cent, 3.25 per cent and 3.0 per cent of their NDTL effective from the reporting fortnight beginning September 6, October 4, November 1 and November 29, 2025, respectively.
3. A copy of the relative notification DoR.RET.REC.24/12.01.001/2025-26 dated June 6, 2025 is enclosed.
Yours faithfully,
(Manoranjan Padhy)
Chief General Manager
Encl.: As above
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DoR.RET.REC.24/12.01.001/2025-26
June 06, 2025
NOTIFICATION
In exercise of the powers conferred under the sub-section (1) of Section 42 of the Reserve Bank of India Act, 1934 and sub-section (1) of Section 18 of the Banking Regulation Act, 1949 (10 of 1949), read with Section 56 thereof, and in partial modification of the earlier notification DoR.RET.REC.53/12.01.001/2024-25 dated December 06, 2024, the Reserve Bank of India hereby notifies that the average Cash Reserve Ratio (CRR) required to be maintained by every bank shall be 3.75 per cent, 3.5 per cent, 3.25 per cent and 3.0 per cent of its net demand and time liabilities effective from the reporting fortnight beginning September 6, October 4, November 1 and November 29, 2025, respectively.
(R. Lakshmi Kanth Rao)
Executive Director
RBI/2025-26/45
DoR.RET.REC.22/12.01.001/2025-26
June 06, 2025
All banks,
Madam / Sir,
Penal Interest on shortfall in CRR and SLR requirements – Change in Bank Rate
Please refer to Chapter VIII of Master Direction – Reserve Bank of India [Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR)] Directions – 2021 as well as our circular DoR.RET.REC.16/12.01.001/2025-26 dated April 09, 2025 on the captioned subject.
2. As announced in the Monetary Policy Statement 2025-26 dated June 06, 2025, the Bank Rate is revised downwards by 50 basis points from 6.25 per cent to 5.75 per cent with immediate effect. Accordingly, all penal interest rates on shortfall in CRR and SLR requirements, which are specifically linked to the Bank Rate, also stand revised as under:
Penal Interest Rates which are linked to the Bank Rate
| Item | Existing Rate | Revised Rate (With immediate effect) |
| Penal interest rates on shortfalls in reserve requirements (depending on duration of shortfall). |
Bank Rate plus 3.0 percentage points (9.25 per cent) or Bank Rate plus 5.0 percentage points (11.25 per cent). | Bank Rate plus 3.0 percentage points (8.75 per cent) or Bank Rate plus 5.0 percentage points (10.75 per cent). |
Yours faithfully,
(Manoranjan Padhy)
Chief General Manager
RBI/2025-26/44
DoR.FIN.REC.25/03.10.038/2025-26
June 06, 2025
All Non-Banking Financial Companies – Microfinance Institutions
Dear Sir/ Madam,
Review of Qualifying Assets Criteria
Please refer to paragraph 8.1 of the Master Direction – Reserve Bank of India (Regulatory Framework for Microfinance Loans) Directions, 2022 dated March 14, 2022 which prescribes Qualifying Assets Criteria for Non-Banking Financial Companies – Microfinance Institutions. On a review, it has been decided to revise the qualifying asset criteria and the amended paragraph 8.1 of the Master Direction may be read as follows.
Paragraph 8.1: The definition of ‘qualifying assets’ of NBFC-MFIs has been aligned with the definition of ‘microfinance loans’ given at paragraph 3 above. Qualifying assets of NBFC-MFIs shall constitute a minimum of 60 percent of the total assets (netted off by intangible assets), on an ongoing basis. If an NBFC-MFI fails to maintain the qualifying assets as aforesaid for four consecutive quarters, it shall approach the Reserve Bank with a remediation plan for taking a view in the matter.
2. This circular is issued in exercise of the powers conferred by Chapter IIIB of the Reserve Bank of India Act, 1934. The revised provisions shall come into effect from the date of this circular.
3. Master Direction – Reserve Bank of India (Regulatory Framework for Microfinance Loans) Directions, 2022 is being updated accordingly.
Yours faithfully,
(J.P. Sharma)
Chief General Manager
RBI/2025-26/43
REF.No.MPD.BC.400/07.01.279/2025-26
June 6, 2025
All Primary Dealers,
Standing Liquidity Facility for Primary Dealers
As announced in the bi-monthly Monetary Policy Statement, 2025-26 today, it has been decided by the Monetary Policy Committee (MPC) to reduce the policy repo rate under the Liquidity Adjustment Facility (LAF) by 50 basis points from 6.00 per cent to 5.50 per cent with immediate effect.
2. Accordingly, the Standing Liquidity Facility provided to Primary Dealers (PDs) (collateralised liquidity support) from the Reserve Bank would be available at the revised repo rate of 5.50 per cent with immediate effect.
Yours faithfully,
(Dr. Anupam Prakash)
Adviser-in-Charge
RBI/2025-26/42
FMOD.MAOG.No.152/01.01.001/2025-26
June 06, 2025
All Liquidity Adjustment Facility (LAF) participants
Madam/Sir,
Liquidity Adjustment Facility – Change in rates
As announced in the Monetary Policy Statement dated June 06, 2025, it has been decided by the Monetary Policy Committee (MPC) to reduce the policy repo rate under the Liquidity Adjustment Facility (LAF) by 50 basis points from 6.00 per cent to 5.50 per cent with immediate effect.
2. Consequently, the standing deposit facility (SDF) rate and marginal standing facility (MSF) rate stand adjusted to 5.25 per cent and 5.75 per cent respectively, with immediate effect.
3. All other terms and conditions of the extant LAF Scheme will remain unchanged.
Yours sincerely,
(G. Seshsayee)
Chief General Manager
