RBI has released the draft guidelines for the Call, Notice, and Term Money Markets
In a move to deepen the short-term funding framework in Indian financial markets, the Reserve Bank of India has issued the 2026 draft Master Directions for Call, Notice, and Term Money Markets. This draft focuses on expanding the borrowing limits for standalone primary dealers and widening the scope of participants to enhance participation and liquidity.
Highlights
- The Reserve Bank of India has issued draft guidelines for the Call, Notice, and Term Money Market in compliance with the April 8, 2026 policy.
- Comments on the draft guidelines have been invited from banks, market participants, and other interested parties until July 17, 2026.
- The draft aims to increase the depth of participation, liquidity, borrowing limits for standalone primary dealers, and the participant base in the Term Money Market.
This article was translated from the original. Read the original version by our correspondent here.
Draft Guidelines and Consultation Timeline
According to the Reserve Bank of India press release, this draft has been issued in compliance with the developmental and regulatory policies announced on April 8, 2026. The central bank has invited comments from banks, market participants, and other interested parties until July 17, 2026.Responses can be sent to the Chief General Manager, Financial Markets Regulation Department, Reserve Bank of India, Central Office Building, Shahid Bhagat Singh Marg, Fort, Mumbai 400,001. Suggestions can also be sent via email, with the subject line “Feedback on draft Master Direction – Reserve Bank of India (Call, Notice and Term Money Markets) Directions, 2026.”
Potential Impact on Money Market Depth
The central bank stated that an active term money market provides market participants with alternative funding avenues and also strengthens the transmission of monetary policy. It helps create a link between the overnight money market and long-term interest rates.The draft guidelines aim to further enhance the depth of participation and liquidity in the term money market segment. Expanding the borrowing limits for standalone primary dealers and broadening the participant base is expected to increase transaction activity and funding options in this segment.
Our earlier report discussed the pressure on expected investor returns in the Indian stock market due to high capital costs and rising interest rates. That article also highlighted how limited domestic capital options and the global mobility of foreign capital affect market valuations and funding conditions.
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