Under the extant regulatory framework under FEMA, 1999 and Regulations1 thereunder, the various routes available to residents intending to hedge currency risk are as follows: Exposure based on underlying contracts Probable Exposures based on Past Performance Special Dispensation for SMEs and Individuals Under (i), the Contracted Exposure route, clients have to submit evidence of underlying foreign currency exposure to AD Cat-I banks at the time of booking the derivati

Under the existing regulatory framework, persons resident in India are permitted to buy plain vanilla European call or put options to hedge foreign currency exposures in accordance with Schedule I of Notification No. FEMA/25/RB‐2000 dated May 3, 2000 as amended from time to time from any AD Category‐I bank who has been accorded onetime approval by the Reserve Bank to run a FCY-INR options book. Writing of options by the users, on a standalone basis, is not permitted.

Introduction The system of PDs in the Government Securities (G-Sec) market was introduced in 1995 to strengthen the infrastructure in the G-Sec market, improve secondary market trading system, which would contribute to price discovery, enhance liquidity and turnover and encourage voluntary holding of G-Sec amongst a wider investor base and make PDs an effective conduit for conducting open market operations (OMO). The current guidelines to authorise PDs in the Indian G

To All RBI regulated entities (Commercial Banks, Co-operative Banks, Primary Dealers, Financial Institutions, RRBs and NBFCs) Dear Sir, Guidelines for accounting for Repo / Reverse repo transactions Please refer to our Circular IDMC.3810/11.08.10/2002-03 dated March 24, 2003 setting out uniform guidelines for accounting of repo/reverse repo transactions. These guidelines captured the character of repo/reverse repo transaction as outright sale and outright purchase as

1. Definition of a Derivative A derivative is a financial instrument: (a) whose value changes in response to the change in a specified interest rate, security price, commodity price, foreign exchange rate, index of prices or rates, a credit rating or credit index, or similar variable (sometimes called the 'underlying'); (b) that requires no initial net investment or little initial net investment relative to other types of contracts that have a similar response to chan

As announced in the Annual Policy Statement for the year 2005-06, it has now been decided that permitted structure of PD business will be expanded to include banks, which fulfill certain minimum criteria subject to safeguards. Accordingly, banks are eligible to apply for Primary Dealership, subject to the following guidelines. 2. The following categories of banks would be eligible to apply for PD license. (RBI's approval would be subject to compliance with all other r

भारतीय रिज़र्व बैंक विदेशी मुद्रा नियंत्रण विभाग विदेशी मुद्रा-रुपी ऑप्शंस का परिचय "विदेशी मुद्रा-रुपी ऑप्शंस" पर मसौदा परिपत्र इसके साथ संलग्न है। प्राधिकृत व्यापारी अपनी टिप्पणी मुख्य महाप्रबंधक, विदेशी मुद्रा नियंत्रण विभाग, विदेशी मुद्रा बाजार प्रभाग, भारतीय रिज़र्व बैंक, केंद्रीय कार्यालय, मुंबई 400 001 को 20 मार्च 2002 तक फैक्स (022-22611427) या ईमेल द्वारा अग्रेषित कर सकते हैं। ए. राजलक्ष्मी सहायक महाप्रबंधक टिप्पणियों के लिए मसौदा परिपत्र भारतीय रिज़र्व बैंक विद