DBOD.No.BC. 6/12.02.001/97-98

January 16, 1998

Pausha 26, 1919 (Saka)

All Scheduled Commercial Banks

Dear Sir,

Penal rate of interest on the shortfall in the maintenance of CRR/SLR

Please refer to our circular DBOD. No. BC. 136/12.02.001/97-98 dated 21st October 1997 on the captioned subject.

2. In this connection, we invite your attention to paragraph 1(a) of our Deputy Governor's Circular No. MPD. BC. 171/07.01.279/97-98 dated January 16, 1998 in terms of which the Bank Rate has been increased by two percentage points, i.e., from the present level of '9.00 per cent per annum' to '11.00 per cent per annum' with effect from the close of business to-day (January 16, 1998). Consequently, the penal rate of interest charged on the amount of shortfalls in the maintenance of Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) which is linked to Bank Rate stands revised from the close of business on January 16, 1998.

Yours faithfully,

(D.V. Jhaveri)

General Manager