RBI raises bank rate to 9.5%

The Reserve Bank of India (RBI) raised its bank rate to 9.5% from 6% with immediate effect, to align it with the marginal standing facility (MSF) rate, the central bank said.

The rate at the MSF, which is an additional liquidity window for banks, is 100 basis points above the RBI's repo rate and now stands at 9.5%.

"This [rate change] should be viewed and understood as one-time technical adjustment... rather than a change in the monetary policy stance," the RBI said in a release.

"Henceforth, whenever there is an adjustment of the MSF rate, the RBI will consider and align the bank rate with the revised MSF rate."

Bank rate is the rate at which RBI buys or re-discount bills of exchange or other commercial paper eligible for purchase, the statement said.