Brief Overview:
A revised and unified framework for call, notice and term money markets, consolidating earlier guidelines and aligning them with current market practices has been released for public consultation. The draft focuses on broadening participation, enhancing borrowing flexibility (especially for SPDs, NBFCs and AIFIs), and improving operational efficiency, while retaining prudential safeguards and strong reporting standards.
Technical Details:
Key Highlights
1) Wider market access: Participation expanded to NBFCs (excluding BL), AIFIs and companies as term money lenders; Payments Banks may fully participate in call/notice money but only borrow in term money.
2) Flexible prudential limits: Greater reliance on board-approved internal limits within RBI norms, with SPD borrowing limits increased, including up to 400% of NOF for term money.
3) Updated operations: References shift to the RBI-authorised NDS-CALL operator, and trading hours extend from 5:00 PM to 7:00 PM.
4) Stronger discipline: Term money can be unwound only after 14 days, with continued emphasis on real-time reporting and compliance.
5) Comments: To be submitted by 17th July 2026.
Takeaways:
The draft framework signals RBI’s intent to deepen the money market by widening participation, improving term funding access and giving regulated participants greater operational flexibility. At the same time, the changes remain anchored in board-approved limits, prudential norms, tighter unwind conditions and real-time reporting, reflecting a calibrated shift towards a broader, more liquid and better-governed money market.
For further details, please see:
RBI (Call, Notice and Term Money Markets) Directions, 2026 – Draft
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