RBI Releases Draft Direction on Money Markets

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  • Last Updated on 27 June, 2026

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RBI Draft Master Direction on Money Markets

Press Release: 2026-2027/545, Dated: 25.06.2026

The Reserve Bank of India (RBI) has issued the Draft Master Direction on Call, Notice and Term Money Markets, 2026. The draft has been released pursuant to the announcement made in RBI’s Statement on Developmental and Regulatory Policies dated April 8, 2026.

The draft directions seek to provide an updated regulatory framework for transactions in the call, notice and term money markets.

1. Draft Directions Issued for Stakeholder Feedback

RBI has invited comments and suggestions on the draft Master Direction from:

  • Banks;
  • Market participants; and
  • Other interested stakeholders.

Feedback may be submitted up to July 17, 2026.

2. Coverage of Call Money Market

The draft directions cover transactions in the call money market, which generally involve borrowing and lending of funds for very short durations.

The framework is intended to regulate participation, transactions and operational requirements in this segment.

3. Coverage of Notice Money Market

The draft also covers the notice money market, where funds are borrowed and lent for a period longer than call money but within the prescribed short-term framework.

This segment plays an important role in short-term liquidity management for eligible participants.

4. Coverage of Term Money Market

The draft Master Direction further defines the term “money market,” which involves the borrowing and lending of funds for specified tenors.

The proposed framework seeks to clarify the regulatory treatment and operational requirements applicable to such transactions.

5. Objective of the Draft Directions

The draft directions aim to:

  • Update the regulatory framework for call, notice and term money markets;
  • Provide clarity to eligible market participants;
  • Strengthen transparency and market discipline;
  • Support the orderly functioning of short-term money markets; and
  • Align the framework with evolving market practices.

6. Expected Impact

The draft Master Direction is expected to streamline the regulatory requirements governing short-term money market transactions. It may also improve consistency in market practices and support effective liquidity management by banks and other eligible participants.

8. Key Takeaway

RBI has issued the Draft Master Direction on Call, Notice and Term Money Markets, 2026 pursuant to the announcement made in its Statement on Developmental and Regulatory Policies dated April 8, 2026. Stakeholders may submit comments and suggestions by July 17, 2026.

Click Here To Read The Full Press Release

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied