The Reserve Bank of India has updated its Credit Derivatives Directions and its Repurchase Transactions (Repo) Directions to explicitly clarify that the National Bank for Financing Infrastructure and Development (NaBFID) is permitted to participate in Reserve Bank-regulated financial markets as an All-India Financial Institution (AIFI). The clarification covers NaBFID’s ability to undertake credit default swap and repo transactions under the relevant frameworks. The circular points to the earlier confirmation that NaBFID would be regulated and supervised by the Reserve Bank as an AIFI under Sections 45L and 45N of the Reserve Bank of India Act, 1934 and the Master Direction on prudential regulations for AIFIs. The specific instruments updated are the Master Direction – Reserve Bank of India (Credit Derivatives) Directions, 2022 and the Repurchase Transactions (Repo) (Reserve Bank) Directions, 2018 (updated as on November 28, 2019), issued under Sections 45W and 45U of the Act. The updated directions apply with immediate effect.
Reserve Bank of India 2025-01-01
Reserve Bank of India updates credit derivatives and repo rules to clarify NaBFID may participate as an All-India Financial Institution in RBI-regulated markets
The Reserve Bank of India clarified that the National Bank for Financing Infrastructure and Development (NaBFID) can participate in financial markets as an All-India Financial Institution (AIFI), engaging in credit default swap and repo transactions. This update to the Credit Derivatives Directions and Repurchase Transactions Directions confirms NaBFID's regulation under the Reserve Bank of India Act, 1934. The changes are effective immediately.