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Call Money Market Hours: RBI Group Suggests 7 PM Close

3 May 20251 min read
BANKING & FINANCECall Money MarketHours: RBI GroupSuggests 7 PMClose3 May 2025safalsetu.com

Why in the news

An RBI group wants money-market timings to match payment systems that run round the clock.

Proposals

SegmentSuggestion
Call moneyClose at 7 PM, not 5 PM
Market repo and TREPSUnified, now to 4 PM from 3 PM
G-Sec post-market, non-residents5:00-11:30 PM; reported T+1, settled T+2 on NDS-OM
Bond and forexNo change

Reasoning

  • 24×7 RTGS complicates end-of-day liquidity, driving banks to SDF or MSF and costing them income.
  • Call money’s overnight share fell from 13% (2014-15) to about 2%, yet the call rate remains the policy operating target.
  • TREPS holds 69%; market repo 29%.

Exam angle

  • Operating target: call rate.
  • Facilities: Standing Deposit Facility, Marginal Standing Facility.

Test yourself

1. The RBI working group proposed extending call money market hours to what closing time?

Call money hours would go from 5 PM to 7 PM.

2. Which segment holds the largest share, 69%, of the overnight money market, per the working group notes?

TREPS has 69%, market repo 29%, call money about 2%.

3. Which rate is the operating target under RBI's current monetary policy framework, as noted with the call money proposals?

The call rate is the operational target.

This topic is part of Daily Current Affairs 3 May 2025 (19 topics).

All topics of the dayDay quizMay 2025

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