What changed
This Master Direction supersedes the earlier Section I of FMRD Master Direction No. 2/2016-17, Direction No. FMRD.DIRD.09/14.01.001/2018-19, and Direction No. FMRD.DIRD.01/14.01.001/2020-21. It consolidates and updates the regulatory framework for call, notice, and term money markets, incorporating public feedback on draft directions released in December 2020.
What it means for you
Banks and eligible participants must comply with the consolidated 2021 directions, which streamline definitions and operational requirements for unsecured money market borrowing and lending. The update ensures alignment with current market practices and regulatory expectations, impacting how participants report and execute transactions on platforms like NDS-CALL.
What you must do
- Review the full Master Direction text to understand updated definitions and compliance obligations.
- Ensure all call, notice, and term money market transactions are executed and reported as per the new guidelines.
- Update internal policies and training materials to reflect the consolidated 2021 directions.
- Verify that your institution's eligibility and capital fund calculations align with the revised definitions.
Who it affects
All scheduled commercial banks including payment banks and small finance banks, Regional rural banks and cooperative banks, Primary dealers and other eligible market participants, Entities using NDS-CALL or other electronic trading platforms for money market transactions
What is the effective date of these directions?
The directions came into force on April 5, 2021, as per the notification dated April 1, 2021.
Which earlier directions are superseded by this Master Direction?
It supersedes Section I of FMRD Master Direction No. 2/2016-17 dated July 7, 2016, Direction No. FMRD.DIRD.09/14.01.001/2018-19 dated October 29, 2018, and Direction No. FMRD.DIRD.01/14.01.001/2020-21 dated December 4, 2020.
Does this direction apply to cooperative banks?
Yes, the definition of 'Bank' includes cooperative banks as defined under the Banking Regulation Act, 1949.