RBI Allows Small Finance Banks to Deal in Permissible Rupee Interest Rate Derivative Products
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- By Chetan Kulasri
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- Last Updated on 25 April, 2024
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Circular No. RBI/2024-25/23 DOR.MRG.REC.15/00.00.018/2024-25; Dated: 23.04.2024
RBI has decided to permit Small Finance Banks (SFBs) to deal in permissible rupee interest rate derivative products for hedging interest rate risk. This aims to expand the avenues available to the SFBs for hedging interest rate risk in their balance sheets and commercial operations more effectively and to provide them with greater flexibility. Earlier, RBI permits SFBs to use only interest rate futures (IRFs) for the purpose of proprietary hedging. The circular is effective immediately.
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