MUMBAI: A Reserve Bank of India (RBI) working group has recommended extending money market trading hours from the current 5 PM to 7 PM, citing the need to align with 24×7 digital payment systems and India’s growing integration with global financial markets.
The proposed extension would provide banks with greater flexibility to manage short-term liquidity and access interbank and central bank funds more efficiently. The panel’s recommendations are part of a broader review of trading and settlement hours across markets regulated by the RBI.
The group noted that trading hours significantly impact market efficiency by influencing liquidity, volatility, and price discovery. Since the last review in 2019, India’s financial markets have evolved considerably—with more participants, wider product offerings, and increased foreign investor activity, particularly in government securities and derivatives. These changes, along with stronger ties between offshore and domestic markets and advancements in trading technology, have reshaped liquidity patterns and necessitated a re-evaluation of market hours.
Specifically, the panel proposed extending call money trading until 7 PM, with the reporting deadline set at 7:30 PM. Market repo and triparty repo (TREP) trades would be allowed until 4 PM—an hour later than the current cut-off. Correspondingly, the settlement window for repo deals would shift to 5:30–6:30 PM.
To improve market alignment at the start of the trading day, the panel also suggested advancing the Liquidity Adjustment Facility (LAF) auction window to 9:30–10 AM. Fine-tuning operations would remain at the RBI’s discretion throughout the day.
