The Reserve Bank of India (RBI) announced on Wednesday that it will permit participation from non-bank entities, including all-India financial institutions (AIFIs), non-banking financial companies (NBFCs), housing finance companies, and corporates in the term money market. This market segment, where funds are borrowed and lent for durations ranging from 14 days to one year, previously only included banks and standalone primary dealers. The RBI's decision aims to deepen liquidity and enhance the transmission of monetary policy, as it is crucial for linking short-term rates with longer-duration interest rates. The State Bank of India has reported that this move is positive, as it broadens the demand for funds and allows better deployment of intraday surplus liquidity. Analysts expect it to stabilize yields and improve price discovery within the market. Additionally, the RBI has increased borrowing limits for standalone primary dealers to further support market activity.