Sanjay Malhotra: RBI shall set up a working group with representation from various stakeholders to undertake a comprehensive review of trading and settlement timing of markets regulated by the Reserve Bank
FinTech BizNews Service
Mumbai, February 7, 2025: Over the past few years, Reserve Bank of India has expanded the suite of interest rate derivative products available to market participants to manage their interest rate risks. Sanjay Malhotra, Governor, Reserve Bank of India, said while announcing the decisions of the MPC on Friday: “We shall now include forward contracts in Government securities to this suite. This would facilitate long-term investors such as insurance funds to manage their interest rate risk across interest rate cycles. It will also enable efficient pricing of derivatives that use Government securities as underlying instruments.”
Access of SEBI-registered non-bank brokers to NDS-OM
RBI aims to enhance access of retail investors to government securities. Malhotra revealed: “The Reserve Bank shall expand the access of NDS-OM, the electronic trading platform for secondary market transactions in government securities, to non-bank brokers registered with SEBI.”
Review of trading and settlement timings across various market segments
In view of the various developments in financial markets and market infrastructure over the past few years, the RBI shall set up a working group with representation from various stakeholders. Malhotra added: “This group will undertake a comprehensive review of trading and settlement timing of markets regulated by the Reserve Bank. The Group shall submit its report by 30th April of this year.”
Concluding Remarks
To conclude, considering the existing growth-inflation dynamics, the MPC, while continuing with the neutral stance, felt that a less restrictive monetary policy is more appropriate at the current juncture. The MPC will take a decision in each of its future meetings based on a fresh assessment of the macroeconomic outlook.
Mr Malhotra summed up: “We are committed to conduct monetary policy and take such measures, as appropriate, which are timely, carefully calibrated and clearly communicated, to facilitate conducive macroeconomic conditions that reinforce price stability, sustained economic growth and financial stability.”
