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Informist, Monday, Feb. 16, 2026

--RBI seeks comments on banks' reporting instructions draft by Mar 9 
--RBI issues draft norms on reporting instructions for authorised dealer bks 

NEW DELHI – The Reserve Bank of India Monday proposed authorised dealer category-I banks to report necessary details of the over-the-counter foreign exchange derivative contracts involving rupee undertaken by the banks' offshore related parties to the trade repository of Clearing Corp. of India. The RBI has sought feedback on the draft proposal by Mar. 9. 

"Carrying this process of enhancing transparency of Rupee derivative markets, it is now proposed that all Authorised Dealer Category – I banks shall report foreign exchange derivative transactions involving INR undertaken by their related parties globally," the RBI said. "The resultant transparency shall enable better pricing decisions by market participants."

The related party of the authorised dealer category-I bank may also choose to report details of such derivatives undertaken by it independently to the trade repository of CCIL, it said. A 'related party' is a person or entity that is related to the entity that is preparing its financial statements. The term 'related party' excludes associates. 

Further, the central bank has also proposed that all over-the-counter foreign exchange derivative contracts involving the rupee, undertaken globally by the related parties of the authorised dealer category-I banks in India to be reported to the trade repository. "For the purpose of these directions, OTC derivatives shall mean derivatives other than those which are traded on stock exchanges and shall include those traded on electronic trading platforms," the RBI said.

Authorised dealer category-I banks are not required to report transactions undertaken in terms of the back-to-back arrangement and transactions undertaken by the related parties with other authorised dealer category-I banks in India, the RBI proposed. Moreover, banks can have the option of not reporting transactions where the notional value of the contract does not exceed $1 million or equivalent. 

Under the draft norms, an authorised dealer category-I bank is required to ensure that with effect from 12 months after the date of issuance of the directions, transactions reported by it constitute at least 70% of the notional value of all foreign exchange derivative contracts involving rupee undertaken by its related parties. Similarly, with effect from 18 months, it should be 80% and in 24 months, it should consitute at least 90%. 

"An AD Cat-I bank shall report all elements of covered transactions which are relevant to provide meaningful information about the transaction," the central bank said. "This will include, but not be limited to, the notional value, name of the counterparty, maturity date, currency, specifications etc., as applicable to the transaction."

Further, transaction needs to be reported preferably on the date of transaction, but in any case, within two working days from the date of transaction, the RBI said.  End

US$1 = INR 90.65

Reported by Pratiksha

Edited by Akul Nishant Akhoury

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