Context:
Cooperative banks’ participation in the call money market declined after the Reserve Bank of India (RBI) made membership on the NDS-CALL trading platform mandatory. However, their participation has seen a revival in recent months, as per the RBI’s July 2025 bulletin.
Key Highlights:
- Initial Decline:
- Cooperative banks’ activity in the call money market dropped significantly post RBI’s directive making NDS-CALL platform membership mandatory.
- Recent Rebound:
- Participation has increased again, indicating a rise in formal memberships among cooperative banks.
- NDS-CALL Platform:
- A screen-based, quote-driven electronic trading system operated by the Clearing Corporation of India Ltd. (CCIL).
- Facilitates real-time call money transactions.
- Types of Transactions:
- Traded Deals: Executed directly on NDS-CALL.
- Reported Deals: Bilaterally negotiated but reported later to RBI.
- Regulatory Directives:
- April 1, 2021 (RBI Master Direction) and
- September 29, 2022 (FIMMDA Notification)
mandated that all eligible participants in Call, Notice, and Term money markets obtain NDS-CALL membership, shifting market operations toward formal electronic platforms.
- Impact on Market Structure:
- Decline in the share of reported deals,
- Shift toward platform-based trading.
- Liquidity Indicators:
- A widening spread between the Weighted Average Call Rate (WACR) and the policy repo rate indicates increased demand for reserves,
- Resulting in higher overnight call money volumes.
