The Reserve Bank of India (RBI) has tightened rules for foreign exchange derivative transactions involving the Indian rupee. The changes restrict the rebooking of cancelled contracts, lower the limit for transactions without underlying exposure and introduce additional checks for hedging activities.
Under the new measures, authorised dealers will not be permitted to allow users to rebook any foreign exchange derivative contract involving the rupee, whether deliverable or non-deliverable, if it was cancelled with any authorised dealer after the issuance of the Directions. Rollovers of derivative contracts at maturity will continue to be permitted, subject to existing regulatory requirements.
