RBI Panel Proposes Longer Hours For Money Markets Amid Changing Liquidity Needs

A working group appointed by the Reserve Bank of India has recommended extending operating hours for interbank money markets to better reflect the evolving needs of market participants and the growth of payment systems. The panel, chaired by Radha Shyam Ratho, Executive Director at the RBI, was constituted in February 2025 to conduct a comprehensive review of trading and settlement timings across financial markets regulated by the central bank. 

The recommendations, if accepted, will help align financial market operations more closely with 24x7 payments ecosystem.

The group proposes that the call money market—currently operational until 5:00 PM—remain open until 7:00 PM. This move is intended to support banks in managing liquidity, especially as real-time gross settlement transactions and payment systems now operate well into the evening. The recommendation was partly informed by the surge in RTGS volumes continuing until around 7:00 PM, which underscores a need for more accessible late-hour funding options.

Additionally, the group has suggested that trading in the market repo and tri-party repo segments, widely used by mutual funds and other non-bank entities, be extended until 4:00 PM from the existing 2:30 PM and 3:00 PM, respectively. Unifying the trading hours for these segments is also on the table, aimed at simplifying operations and providing uniform access across participant categories.

Between 2014-15 and 2024-25, the overnight money market has grown markedly, with annual turnover surging from ₹281.37 trillion to ₹1,324.05 trillion. This growth has largely been driven by the collateralised segment, while the uncollateralised call money market has witnessed a decline. The report attributes this trend to broader market evolution and increased participation from mutual funds and other institutional players.

Despite advocating longer hours for money markets, the panel has not proposed any changes to trading times in the government securities or foreign exchange markets. It observed that these markets already reflect a healthy distribution of trading activity across the day, and further extension could strain settlement infrastructure without proportionate benefits.