No operational challenges even as RBI's working group recommends extending call money market timing: SBI Chairman CS Setty

The group, however, has not recommended changing the timings of the government securities, interest rate derivatives, and foreign exchange markets.

The working group was chaired by Radha Shyam Ratho, Executive Director, RBI. The central bank has set up the working group, which was announced in the February monetary policy.

Setty also said that at the end of the day some banks left with excess liquidity, which goes in to the standing deposit facility (SDF) of the RBI, and with this move, this funds can be parked in the overnight market.

The RBI has also flagged this concern that banks are parking excess funds in to the SDF, instead of lending it in the call money market, when systemic liquidity is in deficit.

The central bank has also several time urged banks to park money in call money market and make it deeper.

Between 2014-15 and 2024-25, the annual turnover in the overnight money market increased from Rs 281.37 lakh crore to Rs 1,324.05 lakh crore while the daily average turnover increased from Rs 1.17 lakh crore to Rs 5.52 lakh crore, RBI report said.

This growth was largely driven by the expansion of the collateralised segment, where annual turnover rose from Rs 245.27 lakh crore to Rs 1,296.62 lakh crore even as the turnover in call money market declined from Rs 36.10 lakh crore to Rs 27.42 lakh crore, report added.

The call money market is accessible exclusively to banks and SPDs - participants with access to the liquidity adjustment facilities of the Reserve Bank. Co-operative banks are the major lenders in the market while SPDs are the primary borrowers, report said.