Master Direction – Reserve Bank of India (Call, Notice and Term Money Markets) Directions, 2021

Last updated: 05 April 2021

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The Reserve Bank of India has issued the Master Direction – Reserve Bank of India (Call, Notice and Term Money Markets) Directions, 2021. These directions, effective from April 5, 2021, supersede previous guidelines and outline the rules for participants in the Call, Notice, and Term Money Markets. They define key terms, specify eligible participants, and set out prudential limits for borrowing and lending. The directions also cover general guidelines on interest rates, trading venues, market timings, and reporting requirements.

Reserve Bank of India RBI/2021-22/78 FMRD.DIRD.01/14.01.001/2021-22 April 01, 2021 To, All Eligible Market Participants Madam/Sir, Master Direction Reserve Bank of India (Call, Notice and Term Money Markets) Directions, 2021 Please refer to Paragraph 6 of theStatement on Developmental and Regulatory Policies, Reserve Bank of India, issued as part of thesecond Bi-monthly Monetary Policy Statement for 2019-20 dated June 06, 2019regarding Comprehensive Review of Money Market

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FAQ :

Call Money refers to overnight borrowing or lending of unsecured funds. Notice Money is for unsecured funds lent or borrowed for up to 14 days (excluding overnight). Term Money involves unsecured funds lent or borrowed for periods exceeding 14 days up to one year.

Eligible participants include Scheduled Commercial Banks (excluding Local Area Banks), Payment Banks, Small Finance Banks, Regional Rural Banks, Co-operative Banks, and Primary Dealers.

Scheduled Commercial Banks, Payment Banks, Small Finance Banks, and Regional Rural Banks have limits based on 100% of capital funds on a daily average basis and 125% on any given day. Co-operative Banks have a limit of 2.0% of aggregate deposits, and Primary Dealers have a limit of 225% of Net Owned Fund.

Transactions not executed on the NDS-CALL platform must be reported within 15 minutes of execution. Transactions on the NDS-CALL platform do not require separate reporting. Cancellations or terminations also need to be reported within 15 minutes.

These Directions shall come into force with effect from April 05, 2021.

Generally, Call, Notice, or Term Money transactions are not meant to be cancelled. However, Notice or Term Money transactions can be terminated before maturity if both parties agree on a price. Any cancellation or termination must be reported.

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Notification No : RBI/2021-22/78 FMRD.DIRD.01/14.01.001/2021-22
Published in Community & General
Source : https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12061&Mode=0

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