The Reserve Bank of India plans to relax access to the money market, expanding participation for non-bank institutions and enterprises.

Golden Ten Data reported on June 26 that the Reserve Bank of India has proposed to broaden participation in the country's money market by including shadow banks, corporations, and other financial institutions. The move aims to further deepen the financing market and expand short-term liquidity access channels. According to current regulations, India's term money market only allows banks and standalone primary dealers to trade under prudent regulatory restrictions. A draft rule released by the Reserve Bank of India on Thursday evening indicates that non-bank financial companies, including mortgage institutions, will be permitted to participate in term money market transactions as both borrowers and lenders. The Reserve Bank of India stated that this reform was first proposed in the April monetary policy statement this year and that it will seek public comments on the draft rules. As per the draft, corporations will also be allowed to participate in the term money market as lenders, but smaller non-bank financial companies will be excluded.