Current · Source: Reserve Bank of India · RBI/2023-24/38 · issued 08 Jun 2023 · ~1 min read
Quick answerScheduled Commercial Banks (excluding SFBs and PBs) can now set their own borrowing limits in Call and Notice Money Markets, subject to board-approved internal limits and prudential inter-bank liability norms.
The rule, in the simplest words
Banks (except small finance banks and payment banks) can now decide how much they want to borrow in the Call and Notice Money Markets (short-term loans between banks for a day or a few days).
The bank's board (group of top bosses) must approve the borrowing limit, and it must follow the safety rules for how much one bank can owe another bank.
Before, the RBI (central bank) set the borrowing limit; now the bank sets its own limit, so it has more freedom to manage its cash needs.
How it plays out — a real example
A treasury officer in Indore, Priya, works at a scheduled commercial bank. Her treasury team used to wait for RBI to tell them the maximum they could borrow overnight. Now, after the bank's board approved a new limit, Priya's team can quickly borrow extra funds from other banks to cover a sudden rush of gold-loan disbursements, without worrying about breaking a fixed RBI cap.
What changed
Previously, RBI prescribed borrowing limits for Call and Notice Money Markets. Now, Scheduled Commercial Banks (excluding small finance banks and payment banks) can set their own limits, with board approval, within prudential inter-bank liability guidelines.
What it means for you
Banks gain flexibility to manage short-term liquidity more efficiently, aligning borrowing with their own risk appetite. This reduces regulatory micromanagement but requires robust internal governance to ensure limits stay within prudential boundaries set by the Department of Regulation.
What you must do
Review and update internal policies for Call and Notice Money Market borrowing to reflect self-set limits.
Obtain board approval for the new borrowing limits, ensuring they comply with prudential inter-bank liability norms.
Communicate the revised limits to treasury and risk management teams for immediate implementation.
Monitor adherence to board-approved limits and report any breaches to the board and RBI as per existing guidelines.
Who it affects
Scheduled Commercial Banks (excluding small finance banks and payment banks), Treasury departments of eligible banks, Risk management teams of eligible banks
❓ Common questions
Which banks are excluded from this relaxation?
Small finance banks and payment banks are excluded; they must continue to follow the earlier RBI-prescribed limits for Call and Notice Money Market borrowing.
Do we need board approval for the new limits?
Yes, banks must put in place internal board-approved limits for borrowing through Call and Notice Money Markets, similar to the existing requirement for Term Money Market borrowing.
When does this change take effect?
The instruction is applicable with immediate effect from June 08, 2023, and the Master Direction has been updated accordingly.
📜 Read the original circular — full text as issued by RBI
RBI/2023-24/38
FMRD.DIRD.02/14.01.001/2023-24
June 08, 2023
To
All Eligible Market Participants
Madam / Sir
Reserve Bank of India (Call, Notice and Term Money Markets) Directions, 2021-Review
Please refer to Paragraph 1 of the Statement on Developmental and Regulatory Policies , announced as a part of the Bi-monthly Monetary Policy Statement for 2023-24 dated June 08, 2023 , regarding Borrowing in Call and Notice Money Markets by Scheduled Commercial Banks. Attention is also invited to the Master Direction – Reserve Bank of India (Call, Notice and Term Money Markets) Directions, 2021 dated April 01, 2021 , as amended from time to time (hereinafter referred as ‘Master Direction’).
2. On a review, it has been decided that henceforth, Scheduled Commercial Banks (excluding small finance banks and payment banks) may set their own limits for borrowing in Call and Notice Money Markets. As in the case of Term Money Market borrowing, Scheduled Commercial Banks shall put in place internal board approved limits for borrowing through Call and Notice Money Markets within the prudential limits for inter-bank liabilities prescribed by Department of Regulation.
3. The instruction shall be applicable with immediate effect. The Master Direction has been accordingly updated.
Yours faithfully,
(Dimple Bhandia)
Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2023-24/38 · issued 08 Jun 2023. The plain-English explanation above is BankPulse’s own independent summary.
Example: if you are a Compliance officer at a bank this circular applies to (Scheduled Commercial Banks (excluding small finance banks and payment banks), Treasury departments of eligible banks, Risk management teams of eligible banks), your first concrete step on “Call Money Borrowing Limits: Banks Get Autonomy” is: “Review and update internal policies for Call and Notice Money Market borrowing to reflect self-set limits.” (RBI issued this 08 Jun 2023).
Circular: RBI/2023-24/38 -- Call Money Borrowing Limits: Banks Get Autonomy
Issued: 08 Jun 2023
Action required: Review and update internal policies for Call and Notice Money Market borrowing to reflect self-set limits.
Action required: Obtain board approval for the new borrowing limits, ensuring they comply with prudential inter-bank liability norms.
Action required: Communicate the revised limits to treasury and risk management teams for immediate implementation.
Action required: Monitor adherence to board-approved limits and report any breaches to the board and RBI as per existing guidelines.
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.
💬 Banker Discussion
Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.
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=12511&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.
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