Extended Trade Hours: RBI Proposes Longer Market Timings

If the Reserve Bank of India's recent proposal goes ahead, markets might see an increase in trade hours. Imagine a bank completing a transaction of ₹145 crore at 6:45 PM instead of closing things at 5 PM.

Or imagine a financial institution making last-minute adjustments in liquidity in the market for call money before 7 PM. 

Such possibilities are under consideration as the Reserve Bank plans to extend hours, especially in the market for call money.

For more information, continue reading this blog to know what is being proposed and how it will impact the different participants in the financial market.

The Current Market Timings

For a better understanding of the relevance of this proposal, firstly, have a look at the current timings of the market:

You can see that most markets close by or around 5 PM. It leaves little room for late day adjustments. The proposal of RBI is aiming to change this.

What Is The RBI Proposing?

The key suggestions made by a proposal in RBI are:

Why Does This Matter?

This proposal is not about only making adjustments in hours of trading. It is also about making sure of smoother operations in the financial markets.

1. Liquidity Management

In April 2025, the daily average volumes in the market for call money touched ₹1.5 lakh crore. The RBI is looking out to help financial institutions and banks in managing end-of-day liquidity gaps by extending the operating hours. 

If your bank finds at 6:30 PM that there is a shortage of ₹120 crore, then currently it has no option for borrowing at such an hour. With the extended window, banks can borrow that ₹120 crore to meet the requirement.

2. Better Alignment with Global Markets

You might know that across the globe, financial markets operate later in the day. Increasing hours of local trade until 7 PM will allow you as an investor to adjust your trades based on late-day developments across other global financial hubs.

3. Improved Flexibility for Late-Day Settlements

Liquidity crunch might be created for corporations due to late payment. If a corporation is receiving a payment of ₹200 crore at 5:30 PM, then it cannot use it instantly. 

With the increased trading hours, the corporation will be able to invest this amount overnight in the market for call money. Also, it will be able to earn interest before the next business day.

Who Will Benefit From Extended Hours?

The proposal will be beneficial for various players in the financial market, each in different ways:

What Are The Potential Risks?

1. Operational Strain

With the increasing hours, banks, financial institutions, and market participants will also have to plan for increasing shifts.

The operations of a bank treasury needs to be staffed for extra 2 hours, which will increase costs of operation.

2. System Stress

During peak activity times, you as a market participant might face system delays. It might strain trading platforms and other backend systems.

RBI’s Stand On Forex And Stock Market Hours

You must also know that the RBI panel has not recommended any changes in the timings of the stock market or market hours of forex.

Most of the bulk activities of forex trade happen between 10 AM and 3 PM. So, increasing hours doesn’t look necessary at the moment.

Final Thoughts

The idea of increasing hours is not about keeping markets open for a long duration, instead it is all about improving the efficiency of financial transactions.

The proposal will be very beneficial for banks. It will help them in managing liquidity requirements, support foreign investors with late-hour trades, and help corporates in adjusting their money after hours.

It might take some time for such changes to take full effect. However, the long-term impact of smoother operations and better global integration is clear.

By increasing the window for trade, markets for trading will become more flexible, resilient, and efficient.

FAQs

1. When can we expect the extended hours to start?

Well, the RBI has not set any date yet, but they are still consulting with the participants of the market.

2. Who will benefit the most from this change?

Banks, mutual funds, foreign investors, and corporations will benefit the most.

3. Will forex market timings change?

No, there are no recommended changes to forex market hours.

4. What is the new proposed closing time for the market for call money?

The market for call money may close at 7:00 PM instead of the current 5:00 PM.

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