The Reserve Bank of India has tightened foreign exchange derivative rules for authorised dealers by prohibiting them from offering non-deliverable derivative contracts involving the Indian rupee (INR) to resident and non-resident users, alongside new constraints on rebooking and related-party transactions. Deliverable foreign exchange derivative contracts may continue to be offered for hedging, provided the user does not undertake offsetting non-deliverable derivative positions, and dealers may request information or documents to support compliance. Authorised dealers must not permit rebooking of any INR-related foreign exchange derivative contract, whether deliverable or non-deliverable, that is cancelled after the instructions take effect, and must not enter into any INR derivative contract with related parties as defined under Ind AS 24, IAS 24, or equivalent accounting standards. The measures apply with immediate effect until further review and are issued under the Foreign Exchange Management Act, 1999.
Reserve Bank of India 2026-04-01
Reserve Bank of India bars authorised dealers from offering INR non-deliverable derivatives and restricts rebooking and related-party INR derivative trades
The Reserve Bank of India has tightened foreign exchange derivative rules for authorised dealers by prohibiting non-deliverable derivative contracts involving the Indian rupee and imposing new constraints on rebooking and related-party transactions. Deliverable foreign exchange derivative contracts may still be offered for hedging if users do not maintain offsetting non-deliverable positions, while rebooking of cancelled INR-related contracts is barred and INR derivative contracts with related parties, as defined under Ind AS 24, IAS 24 or equivalent standards, are prohibited.