RBI Releases Draft Guidelines on Rupee Interest Rate Derivatives

Press Release: 2025-2026/550, Dated: 16.06.2025

The Reserve Bank of India (RBI) has issued the Draft Master Direction – RBI (Rupee Interest Rate Derivatives) Directions, 2025 under Section 45W of the RBI Act, 1934. The draft seeks to update and streamline the regulatory framework governing Rupee Interest Rate Derivatives (IRDs) in India.

1. Objective – Aligning with Market Developments

The proposed framework is aimed at aligning existing regulations with recent market developments, which include:

• Introduction of new derivative products
• Increased participation by non-resident entities
• Evolving practices in the domestic financial markets

By updating the guidelines, RBI aims to promote a more vibrant, inclusive, and efficient derivatives market.

2. Key Highlights of the Draft Directions

• Expanded Product Coverage – Inclusion of newer IRD instruments to support innovation and hedging strategies
• Facilitation of Non-Resident Participation – Regulatory provisions to enable broader access for non-resident entities
• Rationalised Reporting Requirements – Simplification and streamlining of reporting norms to reduce compliance burden for market participants
• Uniform Regulatory Approach – Establishment of a consistent framework applicable across categories of market participants

3. Stakeholder Engagement and Public Consultation

To ensure transparency and inclusivity in the regulatory process, the RBI has invited public comments and feedback on the draft directions. Market participants, industry bodies, and other stakeholders are encouraged to submit their views by July 7, 2025.

4. Conclusion

This draft marks a significant step in RBI’s ongoing efforts to modernise financial market regulations and enhance participation while ensuring adequate safeguards and supervisory oversight. The final Master Directions will be notified after considering inputs from the public and industry stakeholders.

Click Here To Read The Full Press Release