The recommendations come from a panel set up by the Reserve Bank of India to review trading and settlement hours across all RBI-regulated markets.
In a bid to adapt to India's rapidly evolving financial ecosystem and round-the-clock digital payment systems, an RBI-appointed working group has recommended extending the trading hours of money markets from the current 5:00 PM to 7:00 PM. The proposal is aimed at enhancing liquidity management and providing banks with greater flexibility to access interbank and central bank funds.
The recommendations come from a panel set up by the Reserve Bank of India to review trading and settlement hours across all RBI-regulated markets. The panel argued that market timing plays a critical role in determining liquidity, price discovery, and market volatility.
"India's financial markets have grown significantly in both size and complexity since the last comprehensive review in 2019," the report said. The expansion includes an increase in market participants, more product diversity, and a surge in non-resident investments, particularly in government securities and derivatives. These shifts have largely been driven by regulatory changes and inclusion in global indices.
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The integration of India's financial system with offshore markets, combined with technological advancements and 24/7 digital payment rails such as UPI, has transformed liquidity patterns and operational needs, prompting the panel to revisit existing market hours.
Specifically, the panel proposed:
Extending call money market trading until 7:00 PM, with a revised reporting window ending at 7:30 PM.
Market repo and triparty repo (TREP) timings extended to 4:00 PM, an hour beyond current limits.
Settlement windows for repo deals moved to 5:30 PM–6:30 PM to support later trading hours.
Liquidity Adjustment Facility (LAF) auctions to begin earlier, at 9:30–10:00 AM, allowing for more synchronised market openings.
