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Informist, Friday, Feb. 7, 2025

--RBI Malhotra: To form working group to review mkt trading, settlement times 

MUMBAI - The Reserve Bank of India will set up a working group to review trading and settlement timings of the markets regulated by the central bank, Governor Sanjay Malhotra said Friday while detailing the outcome of the RBI's Monetary Policy Committee meeting. 

"In view of the various developments in financial markets and market infrastructure over the past few years, we shall set up a working group with representation from various stakeholders to undertake a comprehensive review of trading and settlement timing of markets regulated by the Reserve Bank," Malhotra said. The group shall submit its report by Apr. 30, he said. 

According to the statement on developmental and regulatory policies, synchronised and complimentary market and settlement timings across various financial market segments can facilitate benefits of efficient price discovery and optimisation of the liquidity requirements.

The group will have to identify the frictions, challenges and issues in the overall functioning of markets on account of current trading and settlement timings in terms of transmission of prices and rates across markets, volatility and distribution of trades, liquidity requirements, and netting efficiency, the RBI said.

Along with making recommendations on trading and settlement timings, the group will examine cross-country practices relating to market timings and their influence on market development in terms of participation, liquidity, volumes. The group will also examine the implications, including benefits, costs and challenges, in revising the current timings for trading and settlement.

The central bank also released the list of members of the working group, which includes Radha Shyam Ratho, executive director, RBI, who will be the chairperson of the group. Other members of the group include Ravi Ranjan, deputy managing director, State Bank of India; Lalit Tyagi, executive director, Bank of Baroda; Ashish Parthasarthy, group head - treasury, HDFC Bank; Parul Mittal Sinha, head of financial markets, Standard Chartered Bank; Ashwani Sindhwani, chief executive officer, Foreign Exchange Dealers' Association of India; Ravindranath Gandrakota, CEO, Fixed Income Money Market and Derivatives Association of India; and Shailendra Jhingan, chairperson, Primary Dealers' Association of India. Dimple Bhandia, chief general manager, Financial Markets Regulation Department, RBI, will be member secretary.  

Earlier, the Monetary Policy Committee unanimously decided to lower the policy repo rate for the first time in nearly five years, bringing it to 6.25% from 6.50%. The committee also unanimously voted to retain the 'neutral' policy stance, having adopted it in October from 'withdrawal of accommodation'.  End

Reported by Kabir Sharma

Edited by Vandana Hingorani

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