More than a decade after designating the weighted average call rate as its operating target, the Reserve Bank of India is confronting a stark reality. The very market it relies on for this signal has steadily lost relevance. As volumes in the uncollateralised call money market shrink, the effectiveness of WACR as a monetary policy anchor is increasingly in doubt.When RBI formally adopted WACR as the operating target in May 2011, the interbank call money market was relatively vibrant. Over time, market preference has shifted decisively towards collateralised overnight instruments such as triparty repo and market repo. This change reflects regulatory reforms, credit risk management and broader participation. Between 2014–15 and 2024–25, annual turnover in the overnight market grew nearly fivefold to ₹1,296.62 trillion. Meanwhile, call market volumes fell from ₹36.10 trillion to ₹27.42 trillion. The call market’s share of overnight volumes collapsed to just 2% from 13% a decade ago.
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