What changed
RBI issued a Master Circular consolidating all previous guidelines on call/notice money market operations. No new rules were introduced; the circular merely compiles existing instructions for easier reference.
What it means for you
Banks and primary dealers now have a single reference document for call/notice money market rules, reducing compliance confusion. Prudential limits on borrowing and lending remain unchanged, so banks must continue to monitor their fortnightly averages and daily caps. The circular reinforces the exclusion of non-bank institutions (except PDs) from this market.
What you must do
- Review the Master Circular to ensure your treasury operations align with consolidated guidelines.
- Monitor fortnightly average borrowing and lending against capital funds (scheduled commercial banks) or net owned funds (PDs) as per the specified limits.
- Ensure call/notice money deals are executed within the prescribed dealing session timings (5:00 pm weekdays, 2:30 pm Saturdays).
- Adhere to FIMMDA's Handbook of Market Practices for interest calculation.
- Submit required reports in the format specified in the circular.
Who it affects
Scheduled commercial banks (excluding RRBs), Co-operative banks (excluding Land Development 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). However, on any single day during the fortnight, borrowing can go up to 125% of capital funds.
Are non-bank institutions allowed to participate in the call/notice money market?
No, non-bank institutions other than Primary Dealers are not permitted to participate in the call/notice money market.
What is the dealing session 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.