Mumbai: Motion Round -D -Clock with UPI and other digital rails – and India’s markets are more entangled with global people – an RBI panel has proposed to expand the money market hour from 5 pm to 7 pm. Shift will give banks more flexibility to manage short -term liquidity and reach interbanks and central bank funds.
The recommendations come from a work group established to review trading and disposal hours in RBI-regulated markets. The panel argued that trading hour shapes how efficiently the markets act, affecting liquidity, instability, and the discovery of value. Since the final major reviews in 2019, India’s financial markets expanded size and complexity, with more participants, a broader category of products, and regulatory and index changes led to an increase in government’s securities and derivatives, especially non -resident activity in derivatives.The panel stated that strict links between onshore and offshore markets, advance to trading infrastructure, and round-the-clock payment system changed liquidity dynamics, requiring market timing again.
In money markets, the panel expanded call money trading to close with reporting window to close at 7:30 pm. It has also been recommended that the market repo and triple repo (TREP) trade till 4 pm, one hour later than the current close. According to the trading extension, the settlement window for repo deals will shift at 5: 30-6: 30pm.
To align market operations at the beginning of the day, the panel suggested extending the liquidity adjustment facility (LAF) auction at 9.30-10 pm. The fine-tuning operation will continue at the discretion of the Central Bank throughout the day.
