RBI call money market timings revised: From July 1, 2025, call money and repo markets get extended hours to enhance liquidity management and reduce SDF dependence. Know all changes for competitive exam prep.
🏦 RBI Extends Trading Hours for Call Money, Repo & Tri-party Repo Markets
Extended Call Money Trading Hours
The Reserve Bank of India (RBI) has announced that, effective July 1, 2025, the interbank call money market will be open from 9 a.m. to 7 p.m. IST, extended by two hours from the current 5 p.m. closing time This uncollateralised overnight market allows banks to manage short-term funding needs.
Extended Repo & Tri‑party Repo Timings
Starting August 1, 2025, the collateralised market repo and tri-party repo (TREP) segments will be extended to operate from 9 a.m. to 4 p.m., replacing the previous cut-offs at roughly 2:30 p.m. and 3 p.m. respectively
Rationale Behind the Change
These extensions follow key recommendations from an RBI working group convened in May 2025, led by Radha Shyam Ratho. The group reviewed the timing, efficiency, and liquidity dynamics in interbank markets
Addressing Liquidity Mismatch
The shift aims to reduce large Standing Deposit Facility (SDF) balances parked by banks post 5 p.m.—primarily due to 24×7 RTGS/NEFT operations. During May–June 2025, average SDF deposits hovered at ₹2.62 trillion, significantly higher than ₹1.77 trillion in April–MayBy allowing longer access to call and repo markets, banks can better deploy end-of-day liquidity and lower dependency on SDF or Marginal Standing Facility (MSF).
No Change for Other Markets
Trading hours for government securities, forex, and interest rate derivatives remain unchanged, closing at 5 p.m.
Link with Post-Pandemic Digital Shift
Since the RBI’s last market hours review in 2019, technological transformations like 24×7 payment systems, non-resident participation, and increased digitisation have amplified evening transactions—prompting this timely adjustment
✏️ Why This News Is Important
Enhanced Liquidity Management
Extended access improves daily liquidity flexibility, enabling banks to manage fund flows more effectively until 7 p.m., reducing pressure on SDF and MSF.
Improved Price Discovery
Longer trading hours across market participants can lead to better price discovery in call and repo segments, narrowing lending‑borrowing spreads.
Boost to Financial Efficiency
The change is expected to increase market efficiency, reduce institutional cost burdens, and align with global best practices in liquidity management
Relevance for Economic Exams
Students preparing for banking, insurance, economics, and finance roles should note this shift—illustrating RBI’s proactive measures in monetary operations, SDF framework, and response to digital-era liquidity trends.
🕰️ Historical Context
Pre‑2019 Era
Before the COVID-19 pandemic, the interbank market typically operated from 9 a.m. to 5 p.m.
Pandemic Disruption
During the pandemic, RBI briefly reduced market hours to minimise risk. As the world returned to normal, hours were restored.
Growth of 24×7 Infrastructure
The introduction of continuous RTGS/NEFT in late 2020 and growing non-resident participation, forex, and interest‑rate derivatives trading have pushed transactions into late hours – revealing mismatch in available liquidity windows.
2019 Working Group
A 2019 review was the last comprehensive timing overhaul. Reforms led to extended hours, but were conservative due to evolving market infrastructure.
2025 Working Group
In February 2025, RBI reconvened stakeholders to reassess timing gaps. The resulting recommendation on May 2025 initiated these changes to better match 24×7 ecosystems.
📌 Key Takeaways from “RBI Extends Trading Hours”
| S. No. | Key Takeaway |
|---|---|
| 1. | Interbank call money market trading extended to 9 a.m.–7 p.m. from 5 p.m. starting July 1, 2025. |
| 2. | Market repo & TREP timing extends to 9 a.m.–4 p.m. from August 1, 2025. |
| 3. | SDF balances elevated (~₹2.62 tn) due to liquidity cut-off—extension aims to reduce dependence. |
| 4. | Government securities, forex, derivatives timings unchanged; target focused on money markets. |
| 5. | Initiated from working-group recommendations in May 2025 to streamline liquidity and pricing efficacy. |
FAQs: Frequently Asked Questions
1. What is the Call Money Market?
The Call Money Market is an uncollateralised, short-term borrowing and lending market where banks lend money to each other for a duration of one day to manage liquidity requirements.
2. What is the difference between Repo and Tri-party Repo (TREP)?
A Repo is a secured borrowing where one party sells securities to another with an agreement to repurchase them later. A Tri-party Repo (TREP) involves a third-party custodian who manages the collateral, reducing counterparty risk and operational burden.
3. Why has RBI extended the call money market timings?
RBI extended the timings to 7 p.m. to better align with 24×7 RTGS/NEFT payment settlements, reduce reliance on the SDF window, and improve liquidity flow management in the banking system.
4. Will these new timings affect other market segments like government securities?
No. The trading hours for government securities, forex, and interest rate derivatives remain unchanged, closing at 5 p.m.
5. Who will be most impacted by these changes?
Primarily banks, NBFCs, and financial institutions managing short-term liquidity. Indirectly, it may impact the overall cost of funds and liquidity strategies for corporates and government borrowers.
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