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Informist, Thursday, Jun. 25, 2026

NEW DELHI – The Reserve Bank of India Thursday issued draft master direction on the call, notice, and term money markets, with an aim to further enhance the depth of participation and liquidity in the segment by increasing the borrowing limits for standalone primary dealers and expanding the participant base. The central bank has sought feedback on the draft directions by Jul. 17. 

Under the proposed directions, scheduled commercial banks, small finance banks, regional rural banks, co-operative banks, and standalone primary dealers will be eligible to participate in the call, notice, and term money markets, both as borrowers and lenders. Further, payments banks are proposed to be eligible to participate in the call and notice money markets, both as borrowers and lenders, and in the term money market only as borrowers, it said. 

The central bank has also proposed that all india financial institutions and non-banking financial companies, excluding base layer NBFCs, be eligible to participate in the term money market both as borrowers and lenders. Companies are also proposed to be eligible to participate in the term money market as lenders, it said.

Under the draft norms, the RBI has proposed that standalone PDs can borrow up to 400% of their net owned funds through term money and inter-corporate deposits combined. Their borrowing limit in call and notice money markets will be at 225% of net owned funds on a daily average basis in a reporting fortnight, it said.

For NBFCs, the proposed borrowing cap in the term money market has been fixed at 200% of net owned funds. All india financial institutions, banks, and small finance banks will be governed by board-approved limits within existing regulatory exposure norms. Eligible participants, with the approval of their respective board of directors, are proposed to fix separate internal limits within the prudential limits for borrowing and lending in the call, notice and term money markets, the draft said.

Eligible participants are proposed to be free to decide on interest rates in the call, notice, and term money markets. Further, call, notice, and term money transactions shall continue to be executed in over-the-counter markets, including on the NDS-CALL platform or any other electronic trading platform authorised for the purpose by the RBI, it said.

The draft directions also proposed to continue the market timings for call, notice, and term money transactions from 0900 IST to 1900 IST. Further, the draft said that a call, notice or term money transaction should, normally, not be cancelled and a notice or term money transaction is proposed to be terminated before maturity at a mutually agreed price. A term money transaction can be terminated only after 14 days from the date of the transaction, RBI proposed.

The draft directions also seeks to increase market transparency and reporting standards. It proposed that all call, notice or term money transactions, other than those executed on NDS-CALL platform, need to be reported to the NDS-CALL platform within 15 minutes of execution. "For this purpose, all eligible participants in the Call, Notice and Term Money Markets shall obtain membership of NDS-CALL platform," RBI said. "Eligible participants who are not members of NDS-CALL platform shall obtain such membership within a period of six months from the date of these Directions," it added. 

Further, the central bank proposed that any cancellation or termination of a call, notice, and term money transaction will have to be reported on the NDS-CALL platform within 15 minutes of cancellation by each counterparty to the transaction. Moreover, any misreporting or multiple reporting of the same over-the-counter markets deal by a counterparty needs to be immediately brought to the notice of the operator of NDS-CALL system, as well as the RBI. 

The central bank said that in the event of any agency violating any of these proposed norms, it may disallow them from dealing in the call, notice, and term money markets for a period not exceeding one month at a time, after providing reasonable opportunity to the agency to defend its actions, adding that such action may even be made public by the RBI. End

Reported by Pratiksha

Edited by Akul Nishant Akhoury

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