RBI adjusts rebooking and position rules for foreign exchange derivatives involving INR
Risk Management and Inter-Bank Dealings
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RBI issued a notification prohibiting authorised dealers from allowing users to rebook cancelled foreign exchange derivative contracts involving INR, while rollovers at maturity may continue. The threshold for positions not requiring proof of an underlying exposure has been lowered from USD 100 million to USD 5 million, applying across authorised dealers or currency pairs involving INR. Authorised dealers must also obtain an undertaking from users that the same underlying exposure has not been hedged more than once, and retain the relevant documentation for at least two years. The notification takes immediate effect.
The notification both lowers the threshold for positions not requiring proof of an underlying exposure and introduces a new cross-dealer hedging declaration requirement, making it useful for understanding how India is tightening controls and record-keeping for foreign exchange derivatives.
Source:Reserve Bank of India — Notifications · rbi.org.in