Brief Overview:

RBI withdraws the blanket restrictions announced earlier this month and replaces them with a more calibrated regime that broadly prohibits INR derivative dealings with related parties while permitting rollovers of existing contracts and back‑to‑back transactions undertaken for non‑related, non‑resident users.

You may access our alert of the now withdrawn announcement here.

Technical Details:

Under the revised position, dealings with related parties remain restricted, but RBI has allowed:

1) rollover of existing contracts, and

2) back‑to‑back INR derivative transactions undertaken for non‑related, non‑resident clients.

Takeaways:

RBI has softened its position and shifted from a blanket clamp‑down to a more practical, risk‑based framework.

For further details, please see:

Risk Management and Inter-Bank Dealings

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