AD Banks (with IBU) can offer NDDCs to residents

Brief Overview:

The AD Category- I Banks (“AD Banks”) are now allowed to offer non-deliverable derivatives contracts (“NDDCs”) involving INR to resident non-retail users.

Technical Details:

   AD Banks operating an IFSC Banking Unit (“IBU”) are permitted to offer NDDCs to (non-retail) resident users. These contracts are to be cash settled in INR.
   Previously, AD Banks having an IBU were permitted to offer NDDCs to only non-residents. These NDDCs were cash settled in foreign currency only.   Also, flexibility has been introduced to cash settle NDDCs in INR or foreign currency between:

>   2 AD Cat-I banks; and

     >   AD Cat-I bank and a person resident outside India.

   Accordingly, the Master Direction on Risk Management and Interbank Dealings has been amended.

JC Key Takeaways:

This step will boost the INR market. These amendments also provide greater flexibility to users to efficiently design their hedging programs.

For further details, please see:

For any queries/clarifications, please feel free to ping us and we will be happy to chat:

●  Ms. Smrithi Nair (
Ms. Aashka Shah (

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