RBI expands term money market access to NBFCs, AIFs, and housing finance companies(REUTERS)AI Quick ReadSanjay Malhotra, Governor of the Reserve Bank of India, on Wednesday, April 8, announced key measures to deepen the term money market by broadening participation and enhancing liquidity. The central bank has decided to allow non-bank participants—including AIFIs, NBFCs, housing finance companies, and corporates—to access the term money market segment.
Additionally, the RBI has increased the borrowing limits for standalone primary dealers, a move aimed at improving market depth, strengthening liquidity conditions, and making the short-term funding ecosystem more efficient.
The Governor also mentioned that a functioning term money market not only offers an additional funding option for market participants but also contributes to better transmission of monetary policy by establishing a connection between the overnight money market and longer-term interest rates. Currently, only banks and independent primary dealers are allowed to take part in the term money market, subject to specific prudential limits.
Dhanya Nagasundaram works as a Content Producer at LiveMint, specializing in news related to financial markets, stocks, and business. With over eight years of experience in journalism and content creation, she has honed her skills in data-driven reporting and market analysis. Her focus is on monitoring stock trends, initial public offerings (IPOs), corporate news, policy shifts, and larger economic trends that affect investors and market players.
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