The Reserve Bank of India has withdrawn the instructions issued on 1 April 2026 on Risk Management and Inter-Bank Dealings and introduced a prohibition on authorised dealers entering into any foreign exchange derivative contract involving INR with their related parties. Only two carve-outs apply: cancellation and rollover of existing contracts, and back-to-back transactions undertaken with non-related non-resident users in line with the Master Direction on Risk Management and Inter-Bank Dealings. “Related parties” follows the definition in Indian Accounting Standard 24 or International Accounting Standard 24 (or equivalent), and the revised instructions apply with immediate effect.
2026-04-20Reserve Bank of India
Reserve Bank of India withdraws prior guidance and restricts authorised dealers from INR FX derivatives with related parties
The Reserve Bank of India has withdrawn its 1 April 2026 instructions on Risk Management and Inter-Bank Dealings and now prohibits authorised dealers from entering into any foreign exchange derivative contract involving INR with related parties. Limited carve-outs apply for cancellation and rollover of existing contracts and for back-to-back transactions with non-related non-resident users, with “related parties” defined under Indian Accounting Standard 24 or International Accounting Standard 24, and the revised instructions taking immediate effect.