**Policy Summary: Regional Rural Banks' Access to Call/Notice/Term Money Market**
This policy, issued by the Reserve Bank of India (RBI) on December 4, 2020, permits Regional Rural Banks (RRBs) to participate in the call/notice and term money markets as both borrowers and lenders. This decision was initially announced in the Statement of Developmental and Regulatory Policies on the same date. The prudential limits and guidelines governing RRBs' involvement in these markets will align with those applicable to Scheduled Commercial Banks, as outlined in RBI Master Direction No.2/2016-17, dated July 7, 2016, concerning Money Market Instruments. These instruments include call/notice money market instruments, Commercial Paper, Certificates of Deposit, and Non-Convertible Debentures with an original maturity of up to one year, as amended periodically. The policy is issued under Section 45W of the Reserve Bank of India Act, 1934, and takes effect immediately. RRBs may direct inquiries to the Chief General Manager, Financial Market Regulation Department, Reserve Bank of India, Central Office, 9th Floor, Central Office Building, Shahid Bhagat Singh Marg, Fort, Mumbai – 400 001, or via email at cgmfmrdrbi.org.in. The Financial Market Regulation Department can also be reached at Telephone No.: 022-22603000 and Fax No. 022-22702290.
Key Entities Referenced
Reserve Bank of India: The central bank of India, the issuer of this notification.
Regional Rural Banks: Banks in India that are the primary subject of the notification, now allowed to participate in the call/notice/term money market.
Call/Notice/Term Money Market: A segment of the money market where short-term funds are traded. RRBs are now permitted to participate.
RBI Master Direction No.2/2016-17: A set of guidelines issued by the RBI regarding money market instruments, which will also apply to RRBs.
Money Market Instruments: Call/Notice Money Market, Commercial Paper, Certificates of Deposit and Non-Convertible Debentures: Instruments regulated by the RBI Master Direction No.2/2016-17
Financial Market Regulation Department: The department of the Reserve Bank of India responsible for the notification.
Mumbai, Maharashtra: City in India where the central office of RBI is located
Reserve Bank of India Act, 1934: The act under which the Reserve Bank of India derives its powers to issue these directions.
भारतीय �रज़व र् बक�
RESERVE BANK OF INDIA
www.rbi.org.in
RBI/2020-21/78
FMRD.DIRD.01/14.01.001/2020-21 December 04, 2020
All Eligible Market Participants
Madam/Sir,
Regional Rural Banks - Access to Call/Notice/Term Money Market
A reference is invited to the Statement of Developmental and Regulatory Policies dated
December 4, 2020 wherein it was announced that Regional Rural Banks (RRBs) shall be
permitted to participate in the call/notice/term money market.
2. Accordingly, RRBs shall be permitted to participate in the call/notice and term money
markets both as borrowers and lenders. The prudential limits and other guidelines on
call/notice/term money markets for the RRBs shall be the same as those applicable to
Scheduled Commercial Banks in terms of the RBI Master Direction No.2/2016-17, dated July
7, 2016 on Money Market Instruments: Call/Notice Money Market, Commercial Paper,
Certificates of Deposit and Non-Convertible Debentures (original maturity up to one year), as
amended from time to time. RRBs may approach the Chief General Manager, Financial
Market Regulation Department, Reserve Bank of India Central Office, 9th floor, Central Office
building, Shahid Bhagat Singh Marg, Fort, Mumbai-400 001 (cgmfmrd@rbi.org.in) in this
regard.
3. These Directions have been issued by RBI in exercise of the powers conferred under
section 45W of the Reserve Bank of India Act, 1934 and of all the powers enabling it in this
behalf.
4. These Directions shall be applicable with immediate effect.
Yours faithfully,
(Dimple Bhandia)
Chief General Manager
िव�ीय बाज़ार िविनयमन िवभाग, केन्�ीय कायार्लया, 9व� मंिजल, फोटर्, मुंबई - 400 001
Financial Market Regulation Department, Central Office Building, 9th Floor, Fort, Mumbai - 400 001
दरू भाष नं. /Telephone No. : 022 22603000 फैक्स नं/Fax No.022 22702290
ब�क �हंदी म �प�ाचार का स्वागत करता है।