The Reserve Bank of India vide its notification dated 15th February 2021 has issued directions for allowing posting and collection of margin for permitted derivative contracts between a person resident in India and a person resident outside India
The Authorised Dealer Category-I bank may post and collect margin in 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 of:
- Indian currency;
- Freely convertible foreign currency;
- Debt securities issued by Indian Central Government and State Governments;
- Rupee bonds issued by persons resident in India are:
- Listed on a recognized stock exchange in India; and
- Assigned a credit rating of AAA issued by a rating agency registered with the Securities and Exchange Board of India. If different ratings are accorded by two or more credit rating agencies, then the lowest rating shall be reckoned.
AD Cat-I banks may post and collect such margin outside India in the form of:
- Freely convertible foreign currency; and
- Debt securities issued by foreign sovereigns with a credit rating of AA- and above issued by S&P Global Ratings / Fitch Ratings or Aa3 and above issued by Moody’s Investors Service. If different ratings are accorded by two or more credit rating agencies, then the lowest rating shall be reckoned.
