New RBI data reveals a recast of India's overnight money market numbers

Private sector banks' share in borrowing through the tri-party repo market fell considerably in the first half of 2026-27, while govt banks increased their presence in the collateralised overnight money market, RBI's monetary policy report released on October 7 showed.According to the data, private lenders accounted for 14% of tri-party repo borrowing during April-September 2026, down from 24% in the preceding six-month period.Public sector banks' contribution to the collateralised overnight money market increased to 35% during the first half of the fiscal from 32% in the previous six months.It may be noted here that tri-party repo transactions involve a third party that manages the collateral backing a borrowing arrangement between the lender and borrower.Also read | RBI brings new rule for banks to measure risks from derivatives, other such dealingsCollateralised segments remained the dominant source of overnight funding, the data revealed. Tri-party repo and market repo together made up 97% of the total overnight money market volume during the first half of 2026-27.The uncollateralised call money market accounted for the remaining 3%. Its share was broadly unchanged during the period.The composition of lenders also varied across the two repo segments.Mutual funds retained their position as the largest lenders in the tri-party repo market, accounting for 65% of lending during the first half of the fiscal. Their share was unchanged from the preceding six-month period.In the market repo segment, however, mutual funds' dominance weakened. Their share of total lending dropped to 41% in the first half of 2026-27 from 48% in the previous six months.Foreign banks moved in the opposite direction, raising their contribution to market repo lending to 31% during April-September from 29% in the preceding half-year period.Also read | FCNR inflows to keep cap on bank deposit ratesThe borrowing pattern among public sector banks also changed in the market repo segment. Their share rose by 5 percentage points to 13% during the first half of 2026-27.Overall, the data show that collateralised instruments continued to dominate overnight funding, even as the participation of different bank groups and financial institutions shifted across the repo segments.