What changed
RBI issued a Master Circular consolidating all previous guidelines on call/notice money market operations into one document. It updates and replaces earlier circulars listed in the appendix, providing a single reference for eligible institutions.
What it means for you
Banks and Primary Dealers now have a unified set of rules for overnight (call) and 2-14 day (notice) money market transactions. Prudential limits on borrowing and lending remain unchanged, with scheduled commercial banks capped at 100% of capital funds on a fortnightly average for borrowing and 25% for lending. Non-bank institutions remain barred from this market since August 2005.
What you must do
- Review the Master Circular to ensure your institution's call/notice money market operations comply with the consolidated prudential limits.
- Update internal policies and training materials to reference this single circular instead of multiple older ones.
- Ensure dealing hours (5:00 pm weekdays, 2:30 pm Saturdays) and FIMMDA documentation standards are followed.
- Verify that non-bank entities are not participating in call/notice money market transactions.
Who it affects
Scheduled Commercial Banks (excluding RRBs), Co-operative Banks, Primary Dealers
What are the borrowing limits for scheduled commercial banks in the call/notice money market?
On a fortnightly average basis, borrowing cannot exceed 100% of capital funds (Tier I + Tier II capital from latest audited balance sheet). However, on any single day during a fortnight, borrowing can go up to 125% of capital funds.
Are non-bank institutions allowed in the call/notice money market?
No, non-bank institutions have been prohibited from participating in the call/notice money market since August 6, 2005.
What is the dealing window for call/notice money market transactions?
Deals can be executed up to 5:00 pm on weekdays and 2:30 pm on Saturdays, or as specified by RBI from time to time.