The Reserve Bank of India vide its notification dated 23rd October 2020 has published the Foreign Exchange Management (Margin for Derivative Contracts) Regulations, 2020 to promote orderly development and maintenance of foreign exchange market in India.
Under this regulation, no person shall post or collect margin for derivative contracts and pay or receive interest on such margin without the prior permission of the Reserve Bank.
However, the authorized dealers may Post and collect margin, in India and outside India, on their own account or on behalf of their customers for a permitted derivative contract entered into with a person resident outside India, in the form and manner as specified by the Reserve Bank and shall Receive and pay interest on margin posted and collected on their own account or on behalf of their customers for a permitted derivative contract entered into with a person resident outside India.
