Contents
RBI Extends Repo & Call Money Market Hours By Two Hours
The Reserve Bank of India (RBI) has announced extension of market hours for the repo and call money markets.
At present the market closes at 5 PM IST, which has been extended by two hours. Effective from July 1st, that means market will remain open till 7 PM IST. Hours has been extended up to 7 PM IST, effective from July 1st. The main motive is to provide better flexibility to market participants and more liquidity which means it will allow banks and institutions more flexibility to borrow and lend money during the day.
This decision follows recommendations made by a working group chaired by Radha Shyam Ratho, IANS reported.
However, note there are no changes at present to for other markets such as government securities, foreign exchange, and interest rate derivatives. These will remain same under existing timings.
What are Repo and Call Money Markets?
Call Money: Ultra-short-term loans between banks (usually for a day).
Repo Market: A place where banks borrow money using government securities as collateral.
For banks these are crucial tools to manage daily cash needs.
Why This Matters
Better Liquidity: If the market remains open for longer time, allow more transaction of money between banks, especially during volatile times.
Better Interest Rate Control: It helps RBI manage short-term interest rates more efficiently.
Support for Treasury Operations: It will be more beneficial for big financial institutions and companies who can better plan and execute their daily cash and investment activities.
In Short:
If we think extending business hours at bank – will make easier for customer who need quick cha or want to lend money. Same applicable for financial system while operation will be smoother, more flexible with trust.
What is IPO? Is it worth applying each IPO?
https://financewithavd.com/ipo-basics-is-every-offer-worth-applying/
Join us on Facebook: https://www.facebook.com/profile.php?id=61577609274859
Leave a Reply