RBI invites feedback as it proposes opening term money market
The Reserve Bank of India (RBI) is looking to shake up the term money market by letting more types of companies, like eligible non-banking finance companies (NBFCs), housing finance firms, corporations, and financial institutions, lend and borrow short-term funds.
Right now, it is mostly just banks and a few primary dealers in the game.
The goal? Make it easier for different organizations to access quick cash and keep the market flowing smoothly.
If you have thoughts on these changes, RBI is all ears until July 17, 2026.
RBI plans 2x net-owned funds limit
RBI plans to set prudential limits for participation for shadow lenders at 200% of net-owned funds as at the end of the previous fiscal year (i.e., as of March 31, 2026).
Companies can join as lenders, but smaller NBFCs will not be allowed in just yet.
Financial institutions will need to stick closely to RBI's regulations.
For context: This market moves about $70 billion every day but has been pretty exclusive until now, mostly dominated by big banks and secured players.