Specialised non-bank participants to get entry into term money market

Mumbai: The central bank would allow non-bank participants, such as dedicated financial institutions with a national footprint, non-bank firms and home financiers, in the term money market.

The All-India Financial Institutions (AIFI) gaining access to the term money market include specialised, RBI-regulated, government-backed entities like Nabard, Sidbi, Exim, NHB and NaBFID.

The term market was open only to banks and primary dealers previously and inclusion of other participants is expected to fine-tune rates and improve liquidity, analysts say. The RBI will also enhance the borrowing limit in the term money market for standalone primary dealers, it said Wednesday.