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The RBI has released Draft Directions on Call, Notice and Term Money Markets. The new guidelines are as follows:
Eligibility
- The following entities shall be eligible to participate in the Call, Notice and Term Money Markets, both as borrowers and lenders:
- (i) Scheduled Commercial Banks (excluding Local Area Banks);
- (ii) Small Finance Banks;
- (iii) Regional Rural Banks;
- (iv) State Co-operative Banks, District Central Co-operative Banks and Urban Co-operative Banks (hereinafter Co-operative Banks); and
- (v) Standalone Primary Dealers.
- Payments Banks shall be eligible to participate in the call and notice money markets, both as borrowers and lenders, and in the term money market only as borrowers.
- AIFIs and NBFCs, including Housing Finance Companies (HFCs), but excluding NBFCs – Base layer (NBFCs-BL), shall be eligible to participate in the term money market both as borrowers and lenders.
- Companies shall be eligible to participate in the term money market as lenders.
Prudential limits
Prudential limits in respect of outstanding lending transactions in the Call, Notice and Term Money Markets shall be decided by the participants with the approval of their Board. In case of regulated entities, the prudential limits shall be within the regulatory framework of the exposure norms prescribed by the Department of Regulation of the Reserve Bank for the entity concerned.
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| Sr. No. | Participant Category | Prudential Limit |
| 1 | Scheduled Commercial Banks | Call and Notice and Term Money Internal board approved limits within the prudential limits for inter-bank liabilities prescribed by Department of Regulation, Reserve Bank of India. |
| 2 | Small Finance Banks | Call and Notice and Term Money Internal board approved limits within the prudential limits for inter-bank liabilities prescribed by Department of Regulation, Reserve Bank of India. |
| 3 | Payments Banks, and Regional Rural Banks | Call and 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. |
| 4 | Co-operative Banks | Call and Notice and Term Money 2.0% of aggregate deposits as at the end of the previous financial year. |
| 5 | Standalone Primary Dealers | Call and Notice Money 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 400% of Net Owned Fund (NOF) as at the end of previous financial year for borrowing through the term money and inter-corporate deposits (ICDs) together. Provided that the total amount borrowed through ICDs shall not exceed the amount prescribed in the Reserve Bank of India (Standalone Primary Dealers) Directions, 2025 dated November 28, 2025, as amended from time to time. |
| 6 | AIFIs | Term Money Internal board approved limits within the prudential limits prescribed by Department of Regulation, Reserve Bank of India. |
| 7 | NBFCs (including HFCs) except NBFCs- BL | Term Money 200% of NOF as at the end of previous financial year. |
General guidelines
- (a) Interest rates: Eligible participants are free to decide on interest rates in the Call, Notice and Term Money Markets.
- (b) Trading venues: Call, Notice and Term Money transactions shall be executed in Over-the-Counter markets, including on the NDS-CALL platform or any other Electronic Trading Platform authorised for the purpose by the Reserve Bank.
- (c) Market timings: The market timings for Call, Notice and Term Money transactions shall be from 9:00 AM to 7:00 PM on each business day or as specified by the Reserve Bank from time to time.
- (d) Market practices and documentation: Eligible participants shall follow the standard market practices, methodologies and documentation prescribed by Fixed Income Money Market and Derivatives Association of India (FIMMDA), in consultation with the Reserve Bank, from time to time.
Cancellation and termination
- (a) A Call, Notice or Term Money transaction shall, normally, not be cancelled.
- (b) A Notice or Term Money transaction can be terminated before maturity at a mutually agreed price. A term money transaction can be terminated only after 14 days from the date of the transaction.
Reporting requirements
- (a) All Call, Notice or Term Money transactions, other than those executed on NDS-CALL platform, shall be reported to the NDS-CALL platform within 15 minutes of execution (the time when interest rate is agreed), by both counterparties to the transaction or by the Electronic Trading Platform concerned, as the case may be. For this purpose, all eligible participants in the Call, Notice and Term Money Markets shall obtain membership of NDS-CALL platform. Eligible participants who are not members of NDS-CALL platform shall obtain such membership within a period of six months from the date of these Directions.
- (b) A Call, Notice or Term Money transaction executed on the NDS-CALL platform need not be reported separately.
- (c) Any cancellation or termination of a Call, Notice and Term Money transaction shall be reported on the NDS-CALL platform within 15 minutes of cancellation by each counterparty to the transaction or by the Electronic Trading Platform concerned, as the case may be.
- (d) Any misreporting or multiple reporting of the same OTC markets deal by a counterparty shall be immediately brought to the notice of the operator of NDS-CALL system and also to the Financial Markets Regulation Department, Reserve Bank of India, Central Office, Fort, Mumbai, through email.
Click here to download RBI Draft Directions on Call, Notice and Term Money Markets
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