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RBI Draft Master Direction on Call, Notice & Term Money Markets

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📄 Source: Reserve Bank of India · Press Release prid 63023
Quick answerRBI released draft Master Direction for call, notice, and term money markets, aiming to enhance depth of participation and liquidity in term money market by expanding participant base and enhancing borrowing limits for standalone primary dealers. Comments due by July 17, 2026.

What changed

RBI has released a draft Master Direction for call, notice, and term money markets. The draft proposes to enhance borrowing limits for standalone primary dealers and expand the participant base to enhance depth of participation and liquidity in the term money segment.

What it means for you

Banks and market participants will see broader access and higher borrowing caps in term money markets, potentially improving liquidity. The draft aims to strengthen the link between overnight and longer-term rates, offering alternative funding avenues.

The rule, in the simplest words
  • RBI wants more banks and dealers to join the term money market (where money is lent for weeks to months) to make it deeper and more liquid.
  • Standalone primary dealers (banks that only trade government securities) will get higher borrowing limits (the maximum amount they can borrow) in the term money market.
  • All banks and market participants can send their comments on the draft to RBI by July 17, 2026.
  • Banks should review the draft, see how the higher borrowing caps affect their treasury, and get ready for the final rules.
How it plays out — a real example

Rohit, a treasury manager at State Bank of India in Mumbai, reads the draft Master Direction, checks how the increased borrowing limit for standalone primary dealers could let his bank borrow more in the term money market, and emails his feedback to the RBI before the July 17, 2026 deadline.

What you must do

Who it affects

Banks, Standalone Primary Dealers, Market participants in money markets

What is the key objective of this draft Master Direction?

To enhance depth of participation and liquidity in the term money market by expanding participant base and increasing borrowing limits for standalone primary dealers, thereby enhancing monetary policy transmission.

Test yourself

Quick self-check built only from the facts already on this page — tap a question to reveal the answer.

Q1. In one line, what does this circular do?

RBI released draft Master Direction for call, notice, and term money markets, aiming to enhance depth of participation and liquidity in term money market by expanding participant base and enhancing borrowing limits for standalone primary dealers. Comments due by July 17, 2026.

Q2. Who does this circular apply to?

Banks, Standalone Primary Dealers, Market participants in money markets

Q3. What is the first thing you should do about it?

Review the draft Master Direction and assess impact on your treasury operations.

Key dataSee the live numbers behind this topic: Repo Rate Timeline, Credit & Deposit Growth — updated from official RBI data.
Key termsPlain-English definitions of terms in this circular — see the full Indian banking glossary. Repo rate · CASA · Statutory Liquidity Ratio (SLR) · Deposit insurance (DICGC)

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Who does what — compliance checklist
⚙️ Operations
  • Review the draft Master Direction and assess impact on your treasury operations.
📜 Compliance
  • Submit feedback to RBI by July 17, 2026, via email or post.
  • Evaluate potential changes to borrowing limits and participant eligibility for your institution.
  • Prepare for implementation once final directions are issued.
Grouped from the action items above — a single circular may involve more than one team.
Worked example & action-note template

Example: if you are an Operations officer at a bank this circular applies to (Banks, Standalone Primary Dealers, Market participants in money markets), your first concrete step on “RBI Draft Master Direction on Call, Notice & Term Money Markets” is: “Review the draft Master Direction and assess impact on your treasury operations.”.

  1. Circular: https://www.rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=63023 -- RBI Draft Master Direction on Call, Notice & Term Money Markets
  2. Issued: 25 Jun 2026, 18:30 IST
  3. Action required: Review the draft Master Direction and assess impact on your treasury operations.
  4. Action required: Submit feedback to RBI by July 17, 2026, via email or post.
  5. Action required: Evaluate potential changes to borrowing limits and participant eligibility for your institution.
  6. Action required: Prepare for implementation once final directions are issued.
  7. Owner: ____________ Target date: ____________
  8. Board/committee approval needed? Y / N
  9. Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.
AI-drafted · 1-model AI consensus fact-check · under the editorial review of our expert review panel · decoded & published by BankPulse · 25 Jun 2026, 18:30 IST
Official RBI source: https://www.rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=63023 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert review panel. Independent platform, not affiliated with the Reserve Bank of India; never reproduces RBI text verbatim.
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