Sr.

Items

Measures

Effective Date

No.

1

2

3

4

1.

Interest Rates

a.

Bank Rate

Reduced from 8 per cent to 7 per cent.

April 2, 2000

Raised to 8 per cent.

July 22, 2000

b.

Fixed Rate Repos

Reduced from 6 per cent to 5 per cent.

April 3, 2000

Replaced by Variable Rate Repo.

June 5, 2000

c.

Deposit Rates

Savings deposit rate on domestic and ordinary

April 3, 2000

non-resident savings deposits as well as savings

deposits under Non-resident (External) Accounts

Scheme of scheduled commercial banks reduced

from 4.5 per cent to 4.0 per cent.

d.

Non-resident Deposit

Banks given the option to choose the current swap

April 27, 2000

Rates

rates while offering FCNR(B) deposits.

Banks permitted to offer differential rates of

April 27, 2000

interest on NRE deposits on size-group basis on

the lines of domestic term deposits.

Banks permitted to offer differential rates of

April 27, 2000

interest on FCNR(B) deposits on size-group basis

subject to the overall ceiling rate.

e.

Lending Rates

Board of Directors of banks allowed to delegate

April 24, 1999

powers to ALM Committee to fix interest rates

on advances.

Banks allowed to operate different PLRs for

April 24, 1999

different maturities.

Banks allowed to offer fixed rate term loans

April 24, 1999

subject to conformity to ALM guide lines.

The rates of interest on the foreign currency

August 16, 1999

export credits which were to be fixed with

reference to ruling LIBOR were also permitted

to be fixed with reference to EUROLIBOR/

EURIBOR, wherever applicable.

Freedom to banks to charge interest rates without

October 29, 1999

reference to PLR, in respect of i) loans covered

by refinancing schemes of term lending

institutions; ii) lending to intermediary agencies;

and iii) discount of bills with a view to

encouraging bills culture.

Withdrawal of the interest rate surcharge of 30

October 29, 1999

per cent on import finance, in force since January

1998.

Withdrawal of the prescribed minimum interest

October 29, 1999

rate of 20 per cent per annum on overdue export

bills.

Banks permitted to offer all loans on fixed or

April 27, 2000

floating rate basis provided PLR stipulations as

applicable are complied with.

An interest rate surcharge at 50 per cent levied

May 26, 2000

on bank credit for imports as a temporary measure.

The interest rate applicable for overdue export bills

May 26, 2000

in case of export credit not otherwise specified

(ECNOS) at post shipment stage prescribed at 25

per cent per annum (minimum).

f.

Advances against

Banks allowed to charge suitable rates of interest

April 24, 1999

Domestic/NRE/

on advances against domestic/ NRE term deposits

FCNR(B) term deposits

without reference to the ceiling of the PLR in all

cases where deposit rates are more than PLR.

Freedom to banks to charge interest rates on loans

October 29, 1999

against domestic/NRE (irrespective of repayment

of loan in foreign currency or Rupee)/FCNR(B)

deposits to the depositors without reference to

their own PLR.

Banks permitted to charge interest at suitable rates

March 23, 2000

in case of advances up to Rs.2 lakh against third

party deposits, as in case of advances to

depositors against their own deposits.

2.

Reserve Requirements

a.

Cash Reserve Ratio (CRR)

Reduced to 10.0 per cent.

May 8, 1999

Gold imported by authorised banks and lent to

July 31, 1999

jewellery exporters in India for exports exempt

from CRR/SLR.

Liabilities under gold deposits mobilised in India

October 5, 1999

exempt from CRR.

Reduced to 9.5 per cent.

November 6, 1999

Incremental CRR of 10 per cent (over the level

November 6, 1999

as on April 11, 1997) on FCNR(B) deposits

done away with.

Reduced to 9.0 per cent.

November 20, 1999

Inclusion of 'cash in hand' with banks for

December 1, 1999 to

calculation of CRR.

January 31, 2000

Reduced to 8.5 per cent.

April 8, 2000

Reduced to 8.0 per cent.

April 22, 2000

Borrowings of gold mobilized under the Gold

May 6, 2000

Deposit Scheme by authorised banks from other

authorised banks treated as inter-bank liabilities

and exempt from CRR.

Minimum daily requirement of CRR balances

May 6, 2000

reduced from 85 per cent to 65 per cent.

Raised to 8.25 per cent.

July 29, 2000

Raised to 8.50 per cent.

August 12, 2000

b.

Statutory

Remained unchanged at 25 per cent.

-

Liquidity Ratio (SLR)

3.

Refinance

a.

Rate of interest on

Increased from 7 per cent to 8 per cent.

April 1, 1999

Export Credit

Refinance (ECR)

Reduced to 7 per cent.

April 3, 2000

Raised to 8 per cent.

July 22, 2000

b.

Collateralised Lending

Replaced General Refinance Facility. Availment

April 21, 1999

Facility (CLF)

to banks limited to 0.25 per cent of the fortnightly

average outstanding aggregate deposits in 1997-

98 (i.e. Rs.1,314 crore) and for two weeks at the

Bank Rate. Provision of an additional

collateralised lending facility (ACLF), also of

Rs.1,314 crore, at the Bank Rate plus two

percentage points. Imposition of a penal rate of

2 percentage points on CLF and ACLF availed

for second block of two weeks.

The stipulation of a two week cooling period at

October 6, 1999

the end of four weeks of availment of CLF/ACLF

by banks was removed.

c.

Liquidity Support

Tier-I liquidity support (constant throughout the

April 21, 1999

Facility (LSF)

year) against collateral of government securities,

based on bidding commitment and other

parameters, available to PDs at the Bank Rate

for a period of 90 days. Provision of Tier-II

liquidity support against collateral of government

securities to PDs for periods not exceeding two

weeks at a time at the Bank Rate plus 2

percentage points.

d.

Special Liquidity

Introduced to enable banks to meet any

December 1, 1999 to

Support Facility

unanticipated additional demand for liquidity in

January 31, 2000

the context of the century date change. Provision

of liquidity to the extent of banks' excess holdings

of Central Government dated securities/Treasury

Bills over the required SLR at an interest rate of

2.5 percentage points over the Bank Rate.

e.

Export Credit

Banks given the benefit of rediscounting export

May 6, 2000

Refinance Facility

bills with institutions like EXIM Bank and

obtaining refinance from NABARD/EXIM

Bank.

f.

Liquidity Adjustment

The first stage of LAF introduced. ACLF to banks

June 5, 2000

Facility (LAF)

and Tier-II liquidity support to PDs replaced by

variable rate reverse repo auctions. Fixed rate repo

replaced by variable rate repo.

Limits available to banks for all refinance

July 29, 2000 (Stage I)

facilities (including those for CLF) reduced

August 12, 2000 (Stage II)

temporarily to the extent of 50 per cent of eligible

limits in two stages of 25 percentage points each.

g.

Special Funds Facility

A special funds facility introduced for banks and

October 3, 2000

PDs to provide intra-day funds to facilitate

settlement of securities transactions in case of

gridlock.