RBI’s working group recommends extending call money market timings

Reserve Bank of India

A working group set up by the Reserve Bank of India (RBI) has recommended the extending of trading timings for the call money market to 7 PM from the current timing of 5 PM. This, to meet the needs of the banks in real-time payment system.

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.

The report said that standalone primary dealers (SPDs) have given the suggestions or feedback to extend the call money market timings and the reporting window including for cancelled transactions may be permitted till 7:30 PM.

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, 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.