The Reserve Bank of India on 8th August, 2022 has decided that stand-alone primary dealers (SPDs) authorized under section 10(1) of FEMA, 1999 shall also be eligible to offer Foreign Currency Settled Overnight Indexed Swaps (FCS-OIS) to persons not resident in India as well as to other AD Cat-I banks and eligible SPDs.
Banks in India were permitted, in February 2022, to undertake transactions in the offshore Foreign Currency Settled Overnight Indexed Swap (FCS-OIS) market with non-residents and other market makers with a view to removing the segmentation between onshore and offshore OIS markets and improving the efficiency of price discovery. Standalone Primary Dealers (SPDs) are also market-makers, like banks, in the onshore OIS market. It has now been decided that SPDs authorized under section 10(1) of FEMA,1999 will also be permitted to undertake FCS-OIS transactions directly with non-residents and other market-makers. Necessary directions will be issued shortly.
