RBI Master Direction 2026 on call, notice and term money markets was released on June 25, 2026. The Reserve Bank of India has put forth a draft Master Direction aimed at enhancing liquidity and participation in the term money market segment. Banks, standalone primary dealers, and other market participants are affected by these proposed changes that include increased borrowing limits and an expanded participant base. Stakeholders can submit feedback by July 17, 2026.
Quick Summary
- RBI releases draft Master Direction for call, notice, and term money markets.
- Banks, standalone primary dealers and other market participants are affected.
- The draft proposes higher borrowing limits and wider participant inclusion.
- Feedback invited by July 17, 2026, to Financial Markets Regulation Department.
What SEBI announced
The Reserve Bank of India (RBI) on June 25, 2026, released the draft Master Direction titled “Reserve Bank of India (Call, Notice and Term Money Markets) Directions, 2026”. This release follows the announcement made in the Statement on Developmental and Regulatory Policies dated April 8, 2026. The draft document outlines proposed regulatory directions focused on the call, notice, and term money market segments.
Who is affected
The draft Master Direction primarily affects banks, standalone primary dealers, and other market participants engaged in the call, notice, and term money markets. It targets those involved in lending and borrowing activities within these money market segments, including intermediaries facilitating liquidity and funding operations.
What changes for investors, intermediaries or market participants
The key objective of the draft Directions is to deepen the term money market by increasing the borrowing limits for standalone primary dealers. Additionally, it seeks to broaden the participant base, thereby enhancing liquidity and activity in this segment. These changes aim to strengthen the connection between overnight money markets and longer-term interest rates, which can improve monetary policy transmission.
Compliance or operational impact
The draft Directions, once finalised, are expected to require operational adjustments from affected entities to comply with the revised borrowing limits and participation rules. Market participants will need to review the draft and potentially adjust their borrowing strategies and systems to align with new regulatory requirements. However, specific compliance deadlines or penalties are not detailed in the draft.
Key date or circular/order detail
Comments and feedback on the draft Master Direction are invited from banks, market participants, and other interested stakeholders by July 17, 2026. Submissions can be sent to The Chief General Manager at the Reserve Bank of India, Financial Markets Regulation Department, 9th Floor, Central Office Building, Shahid Bhagat Singh Marg, Fort, Mumbai – 400001, or via email with the subject line “Feedback on draft Master Direction – Reserve Bank of India (Call, Notice and Term Money Markets) Directions, 2026.”
What investors should know
Investors and market participants should note that the RBI is working to enhance the liquidity and depth of the term money market segment, which can influence short- to medium-term interest rates. While this draft is open for feedback, the proposed changes indicate a regulatory intent to make borrowing more accessible for certain intermediaries and expand market participation. The full implications will become clearer once the final Directions are issued.
Frequently Asked Questions
What is the RBI Master Direction on Call, Notice and Term Money Markets 2026?
It is a draft regulatory framework released by the RBI setting out proposed directions for the call, notice, and term money market segments, aiming to increase liquidity and widen participation.
Who can provide feedback on the draft Master Direction?
Banks, standalone primary dealers, market participants, and other interested stakeholders can submit comments by July 17, 2026.
What are the key proposed changes in the draft Directions?
The draft proposes increasing borrowing limits for standalone primary dealers and expanding the participant base in the term money market segment.
How will the draft Directions impact monetary policy transmission?
By linking overnight money markets with longer-term interest rates, the draft aims to improve monetary policy transmission through enhanced market liquidity.
Where can the draft Master Direction be accessed?
The official RBI website or the Financial Markets Regulation Department at RBI should be consulted for the detailed draft document and notifications.
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Source note: This article is based on the RBI press release dated June 25, 2026. Readers should refer to the official source for detailed rules, eligibility, deadlines or compliance requirements. View original source.
