The Reserve Bank of India has released a draft Master Direction titled Reserve Bank of India (Call, Notice and Term Money Markets) Directions, 2026, and has invited comments from banks, market participants and other interested stakeholders.
The draft Directions relate to the call, notice and term money markets, which are short-term money market segments used by eligible participants to borrow and lend funds for different maturities. In RBI usage, call money generally refers to overnight funds, notice money covers short tenors beyond overnight, and term money covers longer short-term tenors.
The RBI press release was issued on June 25, 2026. It said the draft has been released in line with the announcement made in the Statement on Developmental and Regulatory Policies dated April 08, 2026.
Deadline for comments
Stakeholders can send their comments on the draft Directions by July 17, 2026. The RBI has asked that feedback be addressed to the Chief General Manager, Financial Markets Regulation Department.
Feedback may be sent to the following postal address:
- The Chief General Manager
- Reserve Bank of India
- Financial Markets Regulation Department
- 9th Floor, Central Office Building
- Shahid Bhagat Singh Marg, Fort
- Mumbai – 400001
The RBI also said comments may be sent by email with the subject line: Feedback on draft Master Direction – Reserve Bank of India (Call, Notice and Term Money Markets) Directions, 2026.
What the draft aims to address
According to the RBI, an active term money market gives market participants another funding avenue. It also helps monetary policy transmission by creating a link between the overnight money market and longer-term interest rates.
Monetary policy transmission refers to the process through which changes in policy rates and liquidity conditions influence rates across financial markets and, over time, borrowing and lending rates in the wider economy. A more active term money market can help market rates beyond the overnight segment reflect policy and liquidity conditions more clearly.
The draft Directions aim to improve participation and liquidity in the term money market segment. The RBI said this would be done by enhancing the borrowing limits for standalone primary dealers and expanding the participant base.
Standalone primary dealers are market participants that play a role in the government securities market. By referring to their borrowing limits in the draft, the RBI has indicated that their ability to access the term money market is one of the areas being reviewed.
Why the consultation matters
The release is part of a consultation process. The Directions are still in draft form, so the RBI is seeking views before finalising the regulatory framework. Banks, market participants and other stakeholders may use the consultation period to point out operational issues, suggest changes, or seek clarifications on the proposed framework.
For readers, the key points are the July 17, 2026 deadline, the subject line required for email feedback, and the RBI’s stated objective: to improve participation and liquidity in the term money market while supporting better transmission from overnight market rates to longer-term interest rates.
The press release was issued by Brij Raj, Chief General Manager, and carries the reference number 2026-2027/545.
Source: Reserve Bank of India Press Releases.