RBI Revises Penal Interest on CRR and SLR Shortfall

Circular No. RBI/2025-26/45 DoR.RET.REC.22/12.01.001/2025-26, Dated 06.06.2025

The Reserve Bank of India (RBI), through its circular dated June 6, 2025, has announced a revision in the Bank Rate, bringing it down from 6.25% to 5.75% with immediate effect. This change has a direct impact on penal interest rates linked to the Bank Rate for non-compliance with statutory reserve requirements.

1. Impact on Penal Interest Rates

As a result of the downward revision in the Bank Rate, the penal interest rates on shortfall in Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) have been automatically adjusted as per the regulatory formula.

The revised penal rates are as follows:

• CRR Shortfall: Bank Rate + 3.0% = 8.75% (Earlier: 9.25%)
• SLR Shortfall: Bank Rate + 5.0% = 10.75% (Earlier: 11.25%)

2. Effective Date and Applicability

These revised rates come into force immediately and are applicable to all scheduled and non-scheduled banks that fail to meet the mandated CRR or SLR requirements as prescribed by the RBI.

3. Regulatory Rationale

The adjustment is in line with RBI’s monetary policy transmission mechanism and reflects its objective to align penalty structures with prevailing policy rates, thereby encouraging compliance and financial discipline among regulated entities.

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