RBI Recommends Extended Money Market Hours Until 7 PM
The Reserve Bank of India (RBI) has recommended extending money market operating hours to 7 PM, aiming to improve the banking system and provide investors with more time. This change could significantly impact banking operations and investment strategies.
RBI's Rationale Behind the Recommendation
The RBI's move is in response to the evolving needs of the financial market. The recommendation aims to enhance the efficiency of the banking system and real-time payment systems. Extending money market hours will allow banks more time to complete transactions, leading to improved operational efficiency.
Impact on Mutual Funds and Repo Markets
The RBI's working group also recommended extending the operating hours of market repo and tri-party repo markets related to mutual funds. Currently, market repo closes at 2:30 PM and tri-party repo at 3 PM. The recommendation proposes extending these hours to 4 PM, providing investors with additional time for transactions.
No Changes to Bond and Forex Markets
However, the operating hours for government bonds and the foreign exchange (forex) market will remain unchanged. The RBI clarified that a final decision on these proposals will be made by the end of May after considering feedback from all stakeholders.
