RBI proposes new rules for money markets, expands access
The Reserve Bank of India has released a draft Master Direction for Call, Notice, and Term Money Markets. The proposed rules aim to enhance depth and liquidity by expanding the participant base and increasing borrowing limits.
Deepening money market participation
The Reserve Bank of India has published a draft Master Direction for Call, Notice, and Term Money Markets, a key initiative announced in its April 08, 2026, Statement on Developmental and Regulatory Policies.
This move aims to significantly enhance both the depth of participation and overall liquidity within these crucial financial segments.
An active term money market is vital for providing alternative funding avenues to market participants, enabling efficient short-term liquidity management.
It also strengthens monetary policy transmission by linking overnight rates with longer-term interest rates.
The proposed directions focus on increasing borrowing limits for standalone primary dealers and expanding the participant base to foster greater competition and market robustness.
Consultation open until July 17
The RBI invites comments on the draft Directions from banks, market participants, and other interested stakeholders.
Feedback should be forwarded to the Chief General Manager, Financial Markets Regulation Department, Reserve Bank of India, Mumbai, by July 17, 2026.
Submissions can be made via post or email, with a specific subject line for email correspondence, ensuring all perspectives are considered in the finalization of these important regulatory guidelines.