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RBI Wants NBFCs and Companies in the Money Market: What the Liquidity Push Means
The RBI is India’s central bank. It is the bank that controls money rules for the whole country. The RBI wants to open the “money market” to more players. The money market is the place where banks and big firms lend and borrow cash for short times. It now wants to let in NBFCs and large companies. An NBFC (Non-Banking Financial Company) is a lender that gives loans but is not a full bank.
On June 25, 2026, the RBI shared a set of draft rules. Draft rules are early rules that are not final yet. The plan is simple. The RBI wants more cash to move around more easily. This is what people call a “liquidity push”. Liquidity just means how easily money can move and be used. Here is what would change.
What the RBI proposed
Right now, only two kinds of players can join the “term money market”. These are banks and standalone primary dealers. A standalone primary dealer is a firm whose main job is to buy and sell government bonds. Government bonds are loans you give to the government. The term money market is where you can borrow for more than 14 days, and up to one year.
Under the new draft, the RBI would let in more players. All Indian financial institutions and NBFCs could join. This includes housing finance companies, which are firms that give home loans. These players could both borrow and lend. Regular companies (called corporates) could join too, but only as lenders. That means companies can give cash, but cannot take it.
None of these new players can enter the “call and notice money market”. That market is for very short loans, like overnight ones that last just a day. People can send their views on the draft until July 17, 2026.
The borrowing limits
The RBI set limits so no one borrows too much. For NBFCs, the limit is 200% of their net owned funds at the end of the last financial year. Net owned funds is a lender’s own core money, like its savings and capital. So an NBFC can borrow up to two times that amount.
For standalone primary dealers, the RBI raised the limit to 400% of net owned funds. That is four times their own core money. This limit covers two things added together: term money borrowing and inter-corporate deposits. Inter-corporate deposits are simply loans given from one company to another.
Each player must also set its own safe limits. These limits need approval from its board, which is the group of top bosses who run the firm. The player must then tell the Clearcorp Dealing System about these limits. Clearcorp runs the NDS-CALL system. NDS-CALL is the online platform the RBI uses for these trades.
Key facts
| Item | Detail |
|---|---|
| Draft rules issued | June 25, 2026 |
| Feedback deadline | July 17, 2026 |
| NBFCs allowed as | Borrowers and lenders |
| Companies allowed as | Lenders only |
| NBFC borrowing limit | 200% of net owned funds |
| Primary dealer limit (raised) | 400% of net owned funds |
| Term money market period | Over 14 days, up to 1 year |
| Off-platform trade reporting | Within 15 minutes |
What it means: the RBI is letting more lenders and borrowers join. This helps short-term cash move more easily. Trades can happen “over-the-counter”. That means two parties deal directly with each other. They can also use the NDS-CALL platform. If a trade is done off the platform, it must be reported to NDS-CALL within 15 minutes. Players can pick their own interest rates. An interest rate is the extra fee paid on top of a loan.
Why the RBI is doing this
The RBI said a busy term money market gives firms one more way to raise funds. Raising funds just means getting money to use. It also helps something called “monetary policy transmission”. This means the RBI’s rate choices reach the whole economy faster. It works by linking very short-term rates to longer-term rates.
The RBI said the draft aims to “further enhance the depth of participation and liquidity in the term money market segment”. In simple words, it wants more players and more cash moving in this market. RBI Governor Sanjay Malhotra first shared these ideas in the April policy. The Governor is the top boss of the RBI. So this draft is the detailed next step.
How the trades will work
The RBI kept the trading rules easy but clear. Players can choose their own interest rates in the money market. Deals can be done over-the-counter. As noted, that means two parties deal directly, not on a public exchange. A public exchange is an open market where many people trade at once. Players can use the NDS-CALL platform. They can also use any other online trading platform the central bank allows.
If a trade is done off the NDS-CALL platform, it must be reported to NDS-CALL within 15 minutes. This keeps the RBI’s view of the market full and up to date. Players can also set their own limits for borrowing and lending. These limits need board approval. They must share these limits with Clearcorp. The goal is to grow the market while keeping risk under control.
FAQ
Can companies borrow in the money market under these rules?
No. Regular companies can only lend. NBFCs and financial institutions can both borrow and lend. None of the new players can enter the call and notice (overnight) money market.
When do these rules take effect?
They are still a draft, so they are not final yet. People can give feedback until July 17, 2026. The final rules will come after the RBI reads all the replies.
Why it matters, especially for India and founders
For NBFCs, this is a new way to get money. Many NBFCs give loans to small businesses and to regular people. So cheaper and easier short-term cash can reach them. Then they can pass it on. For company finance teams, spare cash can now be lent out in the term money market to earn a return. A return is the extra money you make on what you lend. Market players expect easier cash flow and smarter money handling.
This move is part of a bigger set of RBI changes. It sits alongside its new FCNR(B) deposit rules for NRIs and its directions on credit on UPI. NRIs are Indians who live in other countries. Together, these steps show an RBI that wants more money moving through the system.
Bottom line: if the draft becomes law, India’s short-term cash market gets bigger and deeper. That should help NBFCs and companies handle their money better. It should also help the RBI’s rate signals reach the economy faster.
Source: Financial Express — RBI proposes to allow NBFCs in money market in liquidity push.
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