RBI Proposes Wider Access to Indian Money Markets

The Reserve Bank of India issued draft proposals on 25 June 2026 to widen participation in India’s term money market. The draft framework covers non-banking financial companies, including mortgage providers, All India Financial Institutions, and companies, with changes in borrowing, lending, market hours, and reporting rules.

Term Money Market in India

The term money market is a segment of the money market where funds are borrowed and lent for fixed short tenures. In India, participation in this market has mainly remained limited to banks and standalone primary dealers.

Proposed Participants and Roles

Under the draft rules, non-banking financial companies other than base-layer NBFCs and All India Financial Institutions will be allowed to participate as both borrowers and lenders. Companies will be permitted to participate as lenders in the term money market.

Borrowing Limits and Trading Hours

The RBI has proposed a prudential borrowing limit of 200% of net-owned funds for shadow lenders such as NBFCs and housing finance companies in these markets. Standalone primary dealers will have a combined borrowing limit of 400% of their net owned funds through term money and inter-corporate deposits. The proposed framework also extends market hours from 9 AM to 5 PM to 9 AM to 7 PM on business days.

Important Facts for Exams

• The Reserve Bank of India is India’s central bank and was established in 1935 under the Reserve Bank of India Act, 1934.
• The NDS-CALL platform is used for reporting and dealing in call money, notice money, and term money transactions.
• All call, notice, and term money transactions executed outside the NDS-CALL platform must be reported within 15 minutes under the proposed rule.
• Standalone primary dealers are financial intermediaries that operate in government securities and money markets.

Stakeholder Consultation

The RBI invited comments from stakeholders and market participants on the draft proposals by 17 July 2026. The proposal forms part of the regulatory framework for short-term funding and liquidity management in India.