RBI Allows AD Cat-I Banks in IFSC to Offer ‘Non-Deliverable Derivative Contracts’ in INR
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- Last Updated on 8 June, 2023
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Circular No. RBI/2023-24/36 A. P. (DIR Series) Circular No. 05, Dated 06.05.2023
RBI has permitted AD Category-I banks operating IFSC banking units to offer non-deliverable derivative contracts (NDDCs) utilizing rupees to resident non-retail users for hedging. The step has been taken in order to develop the onshore rupee NDDC market and to provide residents with the flexibility to plan their hedging.
The transactions shall be cash settled in rupees and shall have the flexibility of cash settlement between two AD banks and between an AD Cat-I bank and a person resident outside India in INR or foreign currency.
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