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

Last updated: 03 July 2021

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The Reserve Bank of India has updated the prudential borrowing limits for transactions in the Call, Notice, and Term Money Markets. These revisions, effective immediately, apply to various market participants including Scheduled Commercial Banks, Payment Banks, Regional Rural Banks, Co-operative Banks, and Primary Dealers. The updated limits are detailed in a revised Table 1 within the Master Directions.

Reserve Bank Of India

RBI/2021-22/61
FMRD.DIRD.06/14.01.001/2021-22

June 25, 2021

All Eligible Market Participants

Madam / Sir

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

Please refer to the Master Direction – Reserve Bank of India (Call, Notice and Term Money Markets) Directions, 2021 dated April 01, 2021 (hereinafter referred as ‘Master Directions’).

2. On a review based on representations received, the prudential borrowing limits for transactions in Call, Notice and Term Money Markets have been revised. Accordingly, in Part 4 (b) of the Master Directions, Table 1 is being revised as under:

Table 1: Prudential limits for outstanding borrowing transactions in Call, Notice and Term Money Markets
Sr. No.	Participant Category	Prudential Limit
1	Scheduled Commercial Banks (including Small Finance Banks)	Call and Notice Money: (i) 100% of capital funds, on a daily average basis in a reporting fortnight, and (ii) 125% of capital funds on any given day. Term Money: (i) Internal board approved limit within the prudential limits for inter-bank liabilities.
2	Payment Banks and Regional Rural Banks	Call, Notice and Term Money: (i) 100% of capital funds, on a daily average basis in a reporting fortnight, and (ii ) 125% of capital funds on any given day.
3	Co-operative Banks	Call, Notice and Term Money: (i) 2.0% of aggregate deposits as at the end of the previous financial year.
4	Primary Dealers	Call and Notice Money: (i) 225% of Net Owned Fund (NOF) as at the end of the previous financial year on a daily average basis in a reporting fortnight. Term Money: (i) 225% of Net Owned Fund (NOF) as at the end of the previous financial year.

3. These Directions have been issued by RBI in exercise of the powers conferred under section 45W of the Reserve Bank of India Act, 1934 and of all the powers enabling it in this behalf.

4. These changes shall be applicable with immediate effect.

Yours faithfully,

(Dimple Bhandia)
Chief General Manager

FAQ :

The Reserve Bank of India has revised the prudential borrowing limits for transactions in the Call, Notice, and Term Money Markets.

The revised limits apply to Scheduled Commercial Banks (including Small Finance Banks), Payment Banks, Regional Rural Banks, Co-operative Banks, and Primary Dealers.

These changes are applicable with immediate effect.

The revised prudential limits are detailed in Table 1 of Part 4 (b) of the Master Direction – Reserve Bank of India (Call, Notice and Term Money Markets) Directions, 2021.

Scheduled Commercial Banks can borrow up to 100% of their capital funds on a daily average basis in a reporting fortnight, and up to 125% on any given day.

Co-operative Banks have a prudential limit of 2.0% of their aggregate deposits as at the end of the previous financial year.

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Notification No : RBI/2021-22/61 FMRD.DIRD.06/14.01.001/2021-22
Published in Community & General
Source : https://rbi.org.in/Scripts/NotificationUser.aspx?Id=12120&Mode=0

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