RBI Proposes Extended Market Hours and Harmonized Settlement Timings in Landmark Review

Image Source: The Hindu Business Line

The Reserve Bank of India (RBI) has issued the long anticipated recommendations of its Working Group on the comprehensive review of trading and settlement timings in financial markets regulated by the RBI. The report, submitted on April 30, 2025, aims to bring India's financial market infrastructure up to date, enhance liquidity, and align with international best practices.

Key Recommendations at a Glance

Extended Call Money Market Timing: Call money market deals can be stretched up to 7:00 PM, allowing greater flexibility in managing short-term liquidity requirements.
Coordinated Repo Market Hours: Tri-Party Repo and market repo trades are to be coordinated and extended to 4:00 PM to facilitate better operational coordination.
Optimization of Liquidity: The committee emphasized synchronizing settlement cycles to avoid bottlenecks and improve funds availability across segments.
Globalization: The proposals are steered by international forces, including 24×5 forex and derivatives market trading.
Public Comments Sought: RBI sought public comments till May 30, 2025, encouraging market participants to share their views before implementation.

Why It Matters

With increased foreign participation, online trading sites, and payment systems working 24 hours a day, the current market timings were felt to be obsolete. All these are likely to: The above modifications are likely to: