RBI notifies IBU participation in Rupee exchange traded currency derivatives

By: |
Published: January 22, 2020 7:57:56 AM

The RBI also stated that banks should also obtain their board’s approval for undertaking such transactions.

The central bank had earlier accepted the recommendation made by the Task Force on Offshore Rupee Markets chaired by Usha Thorat following which it permitted rupee derivatives (with settlement in foreign currency) to be traded in IFSC.

In regard to IFSC Banking Units (IBUs) being allowed to participate in exchange traded currency derivatives on rupee (with settlement in foreign currency) listed on stock exchanges set up at IFSCs, the Reserve Bank of India (RBI) said banks should ensure their IBUs should have necessary expertise to price, value and compute the capital charge and manage the risks associated with the products /transactions intended to be offered.

The RBI also stated that banks should also obtain their board’s approval for undertaking such transactions.
“IBUs shall follow all other risk mitigation and prudential measures as applicable and detailed in this circular while participating in these products,” RBI stated.

The central bank had earlier accepted the recommendation made by the Task Force on Offshore Rupee Markets chaired by Usha Thorat following which it permitted rupee derivatives (with settlement in foreign currency) to be traded in IFSC.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Next Stories
1NSE becomes world’s largest derivatives exchange by number of contracts traded
2ICICI Prudential Life Insurance reports Q3 net at Rs 302 crores
3Government considering lifting ban on onion exports