The Reserve Bank of India vide its notification dated 15th September 2020 has published the Rupee Interest Rate Derivatives (Reserve Bank) Directions, 2020 which shall be applicable to Rupee interest rate derivatives transactions undertaken in Over-the-Counter (OTC) markets and on recognized stock exchanges in India.
The proposed Rupee Interest Rate Derivatives (Reserve Bank) Directions, 2020 are aimed at encouraging higher non-resident participation, enhance the role of domestic market makers in the offshore market, improve transparency, and achieve better regulatory oversight.
Scheduled Banks and Primary Dealers (PDs) are eligible to act as market-makers in IRD market. Foreign counterparts of market-makers in India may offer Rupee IRD transactions to non-residents as provided for under para 5 (d) of these directions.
Further, these Directions shall apply to all Rupee IRD transactions entered into from the date the Directions come into effect. Existing Directions will continue to be applicable to Rupee IRD transactions undertaken in accordance with the said Directions till the expiry of those contracts.
RBI has sought comment on the Draft Rupee Interest Rate Derivatives (Reserve Bank) Directions, 2020 by October 15 which shall be sent through email with the subject line “Feedback on Draft Rupee Interest Rate Derivatives (Reserve Bank) Directions, 2020 or may be forwarded to The Chief General Manager, Reserve Bank of India, Financial Markets Regulation Department, 9th Floor, Central Office Building
Shahid Bhagat Singh Marg, Fort Mumbai – 400001.
