RBI Panel Suggests Extending Call Money Market Operating Hours

The Reserve Bank of India (RBI) could soon permit banks and a few financial institutions to trade in the call money market up to 7 PM. At present, the market operates till 5 PM.

Now, a working group constituted by the RBI has recommended this relaxation to enable banks to better manage their money, particularly with increasing digital payments made in real time.

What is the Call Money Market?

The call money market is where banks lend and borrow money to one another for a very brief period—usually only one day. It assists banks in meeting short-term cash shortages. Such loans are not secured by any security, which is why it’s also referred to as the uncollateralised segment of the money market.

Only specific participants can deal in this market. They are scheduled commercial banks (SCBs) and standalone primary dealers (SPDs). Co-operative banks are typically the primary lenders, while SPDs are the primary borrowers.

Why Are Longer Hours Needed?

Since digital banking and real-time payment systems such as RTGS and IMPS are expanding, banks usually end up requiring money even beyond normal market hours. According to the working group, by keeping the call money market open until 7 PM, banks will get a longer timespan to settle their funds and complete end-of-day obligations.

The group also suggested keeping the reporting window open until 7:30 PM. This will provide additional time to report transactions, such as those cancelled or altered later in the day.

Suggestions Came from Market Participants

The proposal to increase trading hours was not a sudden idea. SPDs had provided their inputs to the RBI working group. They opined that they would be able to deal with their liquidity more effectively and get all their reporting done on time.

The working group, headed by RBI director Radha Shyam Ratho took the views into consideration and it was then decided to expand the timeline. The working group was first announced during the central bank’s monetary policy committee (MPC) meeting in February 2025.

Other Markets Will Keep Current Timings

Though the call money market might see extended operating hours, other important financial markets will remain untouched. The working group has stated that there is no necessity to shift the operating hours of the government securities market, interest rate derivatives market, or the forex market right now. These markets will maintain their existing schedules.

Huge Growth in Overnight Money Market

Even though the call money market’s turnover has declined over the past decade, the overall overnight money market has seen a major increase.

According to the RBI report, the annual turnover rose from Rs 281.37 lakh crore in 2014-15 to Rs 1,324.05 lakh crore in 2024-25. The average daily turnover also grew from Rs 1.17 lakh crore to Rs 5.52 lakh crore in the same period.

Growth for most of it came from the collateralised segment—collateralised by securities. Turnover in that segment increased from Rs 245.27 lakh crore to Rs 1,296.62 lakh crore. The call money market, on the other hand, experienced a decline in turnover from Rs 36.10 lakh crore to Rs 27.42 lakh crore.

Why the Call Money Market Still Matters

Although the collateralised segment is expanding at a faster rate, the call money market continues to be relevant. It provides banks and SPDs with an opportunity to borrow money instantly without having to mortgage any assets. This can be particularly useful in case of unexpected cash deficiencies towards the end of the day.

The RBI feels that longer market hours will enable banks to handle such situations more smoothly and make the financial system more dynamic.

These are presently only suggestions. The RBI will examine the report in greater detail and might seek additional feedback from market participants before taking a final call. If cleared, this step could render India’s money markets more efficient and better positioned for a round-the-clock digital economy.