June 8, 2006

All Scheduled Commercial Banks (excluding RRBs)
and Primary Dealers

Dear Sir,

In view of the current macroeconomic and overall monetary conditions, the Reserve Bank of India has decided to increase the reverse repo rate under the Liquidity Adjustment Facility (LAF) by 25 basis points to 5.75 per cent from 5.50 per cent, with immediate effect.

2. Simultaneously, the repo rate under the LAF, which continues to be linked to the reverse repo rate with a spread of 100 basis points, is also being increased by 25 basis points to 6.75 percent, with immediate effect.

3. The revised rates are effective from June 9, 2006. All other terms and conditions of the current LAF scheme will remain unchanged.

Yours faithfully

(Mridul Saggar)

Director