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New Rules for AD Category-I Banks Aim to Fix Data Gaps in Forex Derivatives Market
(Anytime News Network | Pooja Srivastava)
The Reserve Bank of India (RBI) has issued draft Directions on Reporting Instructions for Authorised Dealer Category–I Banks, marking another significant step toward enhancing transparency in India’s financial markets. The central bank has invited feedback from stakeholders and market participants until March 9, 2026.
The move is part of RBI’s broader effort to improve visibility in over-the-counter (OTC) derivatives markets, including foreign exchange, interest rate, and credit derivatives. Currently, most OTC derivative transactions are reported to the trade repository maintained by the Clearing Corporation of India Limited (CCIL). However, a major gap remains due to the absence of reporting for a large volume of offshore Rupee derivative transactions.
RBI acknowledged that this lack of reporting reduces market transparency and can hinder accurate pricing and risk assessment. To address this, earlier measures required standalone primary dealers (in October 2022) and banks (in December 2025) to report certain global Rupee derivative transactions undertaken by their related parties.
Building on these initiatives, the latest proposal mandates that all Authorised Dealer Category–I banks report foreign exchange derivative transactions involving INR undertaken globally by their related parties. This step is expected to bridge existing data gaps and provide a more comprehensive view of the Rupee derivatives market.
Improved transparency is likely to enhance price discovery, strengthen risk management practices, and enable market participants to make more informed decisions. Analysts believe the move will also align India’s derivatives market with global best practices.
RBI emphasized that the draft Directions are open for public consultation, and the final framework will be shaped based on stakeholder feedback.
