Home › Circulars › RBI/2021-22/61

Revised Prudential Borrowing Limits for Money Markets

Current · Source: Reserve Bank of India · RBI/2021-22/61 · issued 25 Jun 2021 · ~2 min read

Quick answerRBI has revised prudential borrowing limits for Call, Notice, and Term Money Markets. Scheduled commercial banks can now borrow up to 100% of capital funds daily average and 125% on any day. Co-operative banks are capped at 2% of aggregate deposits. Effective from June 25, 2021.

The rule, in the simplest words

Scheduled commercial banks can borrow up to 100% of their capital funds on average each day in short‑term markets (capital funds = the bank’s own money that backs loans).
On any single day, they can borrow up to 125% of their capital funds (125% means a little more than their own money).
Co‑operative banks must keep their short‑term borrowing below 2% of the total deposits they had at the end of the last financial year (deposits = money customers put in the bank).
These limits started on June 25, 2021, so banks have to follow them from that date onward.

How it plays out — a real example

Rohan, a treasury officer at a scheduled commercial bank in Mumbai, checks the bank’s daily borrowing against the new 100% capital‑funds limit. He sees the bank has borrowed 90% of its capital funds today, so he stays within the rule and feels confident that the bank’s liquidity risk is under control.

What changed

The prudential borrowing limits for outstanding transactions in Call, Notice, and Term Money Markets have been revised. For Scheduled Commercial Banks, the limit for Call and Notice Money is now 100% of capital funds on a daily average basis and 125% on any given day. Co-operative Banks are limited to 2% of aggregate deposits from the previous financial year.

What it means for you

Banks and primary dealers now have clearer, revised caps on short-term borrowing, which helps manage liquidity risk. The limits are based on capital funds or deposits, ensuring borrowing stays aligned with financial strength. This may require banks to adjust their treasury operations to stay within the new thresholds.

What you must do

Review and update internal borrowing limits for Call, Notice, and Term Money Markets to align with the revised prudential caps.
Ensure daily average and single-day borrowing for scheduled commercial banks does not exceed 100% and 125% of capital funds respectively.
For co-operative banks, cap borrowing at 2% of aggregate deposits as per last financial year-end.
Primary dealers should monitor borrowing against Net Owned Fund limits of 225% on daily average basis in a reporting fortnight for Call and Notice Money, and 225% of NOF for Term Money.
Communicate changes to treasury and risk management teams for immediate implementation.

Who it affects

Scheduled Commercial Banks (including Small Finance Banks), Payment Banks and Regional Rural Banks, Co-operative Banks, Primary Dealers

❓ Common questions

Regulatory timeline

Stated effective date Effective from June 25, 2021
Decoded by BankPulse 2026-06-18 07:54 IST

Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).

What is the new borrowing limit for scheduled commercial banks in Call and Notice Money?

Scheduled commercial banks can borrow up to 100% of capital funds on a daily average basis in a reporting fortnight, and up to 125% of capital funds on any given day.

Are these changes effective immediately?

Yes, the revised directions are applicable with immediate effect from June 25, 2021.

What is the limit for co-operative banks under the new directions?

Co-operative banks are allowed to borrow up to 2% of their aggregate deposits as at the end of the previous financial year in Call, Notice, and Term Money Markets.

📜 Read the original circular — full text as issued by RBI

Notifications - Reserve Bank of India Skip to main content Selected Selected Change Language हिंदी Search the Website Search Home About Us ▼ About Us Organisation & Functions ▶ Organisation Structure Departments Offices Training Establishment ▶ College of Agricultural Banking Reserve Bank Staff College College of Supervisors RBI's Functions and Working Governors Deputy Governors Executive Directors Communication Policy of RBI Sources of Information ▶ Annual Publications Half-yearly Publications Quarterly Publications Monthly Publications Weekly Publications Occasional Publications SDDS NSDP Data Releases Publications available on Subscription General Information RBI History Museum ▶ The RBI Museum RBI Monetary Museum Notification ▼ Notifications Master Directions Master Circulars Amendment Directions Draft Notifications/Guidelines ▶ Draft Notifications/Guidelines Draft Directions (RE-wise) Index To RBI Circulars Standalone Circulars Circulars Withdrawn Press Releases Speeches & Media Interactions ▼ Speeches Media Interactions Memorial Lectures Podcasts Publications ▼ Biennial Annual Half-Yearly Quarterly Bi-monthly Monthly Weekly Occasional Reports Working Papers Legal Framework ▼ Act Rules Regulations Schemes Research ▼ External Research Schemes RBI Occasional Papers Working Papers RBI Bulletin History DRG Studies KLEMS State Statistics and Finances Statistics ▼ Data Releases Database on Indian Economy Public Debt Statistics Regulatory Reporting ▼ List of Returns Data Definition Validation rules/ Taxonomy List of RBI Reporting Portals FAQs of RBI Reporting Portals Home Notifications Notifications ( 281 kb ) Reserve Bank of India (Call, Notice and Term Money Markets) Directions, 2021 RBI/2021-22/61 FMRD.DIRD.06/14.01.001/2021-22 June 25, 2021 To All Eligible Market Participants Madam / Sir Reserve Bank of India (Call, Notice and Term Money Markets) Directions, 2021 Please refer to the Master Direction – Reserve Bank of India (Call, Notice and Term Money Markets) Directions, 2021 dated April 01, 2021 (hereinafter referred as ‘Master Directions’). 2. On a review based on representations received, the prudential borrowing limits for transactions in Call, Notice and Term Money Markets have been revised. Accordingly, in Part 4 (b) of the Master Directions, Table 1 is being revised as under: Table 1: Prudential limits for outstanding borrowing transactions in Call, Notice and Term Money Markets Sr. No. Participant Category Prudential Limit 1 Scheduled Commercial Banks (including Small Finance Banks) Call and Notice 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. Term Money: (i) Internal board approved limit within the prudential limits for inter-bank liabilities. 2 Payment Banks and Regional Rural Banks Call, 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. 3 Co-operative Banks Call, Notice and Term Money: (i) 2.0% of aggregate deposits as at the end of the previous financial year. 4 Primary Dealers Call and Notice Money: (i) 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: (i) 225% of Net Owned Fund (NOF) as at the end of the previous financial year. 3. These Directions have been issued by RBI in exercise of the powers conferred under section 45W of the Reserve Bank of India Act, 1934 and of all the powers enabling it in this behalf. 4. These changes shall be applicable with immediate effect. Yours faithfully, (Dimple Bhandia) Chief General Manager 2026 All Months January February March April May June July August September October November December 2025 All Months January February March April May June July August September October November December 2024 All Months January February March April May June July August September October November December 2023 All Months January February March April May June July August September October November December 2022 All Months January February March April May June July August September October November December 2021 All Months January February March April May June July August September October November December 2020 All Months January February March April May June July August September October November December 2019 All Months January February March April May June July August September October November December 2018 All Months January February March April May June July August September October November December 2017 All Months January February March April May June July August September October November December Archives 2016 All Months January February March April May June July August September October November December 2015 All Months January February March April May June July August September October November December 2014 All Months January February March April May June July August September October November December 2013 All Months January February March April May June July August September October November December 2012 All Months January February March April May June July August September October November December 2011 All Months January February March April May June July August September October November December 2010 All Months January February March April May June July August September October November December 2009 All Months January February March April May June July August September October November December 2008 All Months January February March April May June July August September October November December 2007 All Months January February March April May June July August September October November December 2006 All Months January February March April May June July August September October November December 2005 All Months January February March April May June July August September October November December 2004 All Months January February March April May June July August September October November December 2003 All Months January February March April May June July August September October November December 2002 All Months January February March April May June July August September October November December 2001 All Months January February March April May June July August September October November December 2000 All Months January February March April May June July August September October November December 1999 All Months January February March April May June July August September October November December 1998 All Months January February March April May June July August September October November December 1997 All Months January February March April May June July August September October November December 1996 All Months January February March April May June July August September October November December 1995 All Months January February March April May June July August September October November December 1994 All Months January February March April May June July August September October November December 1993 All Months January February March April May June July August September October November December 1992 All Months January February March April May June July August September October November December 1991 All Months January February March April May June July August September October November December Top Back to previous page More Links : Bank Holidays Banking Glossary Citizen's Charter Complaints Contact Us COVID-19 Measures E-LMS Events FAQs Financial Education Forms IFSC/MICR Codes Important Websites Opportunities @ RBI RBI Clarifications RBI Kehta Hai RBI’s Vision and Values (1257 kb)--> Right to Information Act Tenders Follow RBI RSS Twitter YouTube Instagram Facebook LinkedIn &copy; Reserve Bank of India. 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Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2021-22/61 · issued 25 Jun 2021. The plain-English explanation above is BankPulse’s own independent summary.

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Who does what — compliance checklist

💻 IT / Systems

Ensure daily average and single-day borrowing for scheduled commercial banks does not exceed 100% and 125% of capital funds respectively.

📜 Compliance

Review and update internal borrowing limits for Call, Notice, and Term Money Markets to align with the revised prudential caps.
For co-operative banks, cap borrowing at 2% of aggregate deposits as per last financial year-end.
Primary dealers should monitor borrowing against Net Owned Fund limits of 225% on daily average basis in a reporting fortnight for Call and Notice Money, and 225% of NOF for Term Money.
Communicate changes to treasury and risk management teams for immediate implementation.

Grouped from the action items above — a single circular may involve more than one team.

Worked example & action-note template

Example: if you are a Compliance officer at a bank this circular applies to (Scheduled Commercial Banks (including Small Finance Banks), Payment Banks and Regional Rural Banks, Co-operative Banks, Primary Dealers), your first concrete step on “Revised Prudential Borrowing Limits for Money Markets” is: “Review and update internal borrowing limits for Call, Notice, and Term Money Markets to align with the revised prudential caps.” (RBI issued this 25 Jun 2021).

Circular: RBI/2021-22/61 -- Revised Prudential Borrowing Limits for Money Markets
Issued: 25 Jun 2021
Action required: Review and update internal borrowing limits for Call, Notice, and Term Money Markets to align with the revised prudential caps.
Action required: Ensure daily average and single-day borrowing for scheduled commercial banks does not exceed 100% and 125% of capital funds respectively.
Action required: For co-operative banks, cap borrowing at 2% of aggregate deposits as per last financial year-end.
Action required: Primary dealers should monitor borrowing against Net Owned Fund limits of 225% on daily average basis in a reporting fortnight for Call and Notice Money, and 225% of NOF for Term Money.
Action required: Communicate changes to treasury and risk management teams for immediate implementation.
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
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.

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BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly).
Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12120&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.