RBI proposes opening term money market to NBFCs, companies

The Reserve Bank of India proposed opening the term money market to a wider set of participants including non-banking financial companies, housing finance companies, All India Financial Institutions and corporates, which is currently restricted to banks and standalone primary dealers. Under the draft framework, AIFIs and NBFCs (including HFCs but excluding base-layer NBFCs) can both borrow and lend, while companies will be permitted to participate as lenders, with borrowing caps fixed at 200 percent of net owned funds for NBFCs and HFCs. The central bank has invited stakeholder comments by 25 July, aiming to deepen liquidity, broaden the lender-borrower pool, and improve monetary policy transmission across interest-rate tenors.