RBI/2025-26/78
A. P. (DIR Series) Circular No. 10

September 22, 2025

Attention of Authorised Persons is invited to the Foreign Exchange Management (Foreign Exchange Derivative Contracts) Regulations, 2000 dated May 03, 2000 [Notification no. FEMA.25/RB-2000 dated May 03, 2000], as amended from time to time and the Master Direction - Risk Management and Inter-Bank Dealings dated July 05, 2016, as amended from time to time (hereinafter referred as ‘Master Direction’).

2. Authorised Dealer Category-I (AD Cat-I) banks in India operating an International Financial Services Centre (IFSC) Banking Unit (IBU), have been permitted under the Master Direction to transact in non-deliverable derivative contracts (NDDCs) involving the Rupee with users, other AD Cat-I banks operating an IBU and banks overseas. On a review, it has been decided that Standalone Primary Dealers (SPDs) authorised as Authorised Dealer Category–III (AD Cat-III), shall also be eligible to transact in NDDCs involving the Rupee.

3. These instructions shall be applicable with immediate effect. The Master Direction has been updated as under:

(i) In paragraph 2.2(vi) of Part-A (Section-I), at the end of the existing paragraph, the following words shall be added, namely: -

“Such transactions can also be offered to residents and non-residents by Standalone Primary Dealers authorised as Authorised Dealer Category-III.”

(ii) In paragraph 2.3(iii) of Part-A (Section-I), after the words “IFSC Banking Unit”, the following words shall be inserted, namely: -

“and Standalone Primary Dealers authorised as Authorised Dealer Category-III”

(iii) In paragraph 3A of Part-C, after the words “(as amended from time to time))”, the following words shall be inserted, namely: -

“and Standalone Primary Dealers authorised as Authorised Dealer Category-III”

(iv) In paragraph 3A of Part-C, after the words “having IBUs”, the following words shall be inserted, namely: -

“Standalone Primary Dealers authorised as Authorised Dealer Category-III”

4. For the purpose of this circular, Authorised Persons shall mean AD Cat-I banks and SPDs authorised as AD Cat-III under Section 10 (1) of the Foreign Exchange Management Act (FEMA), 1999.

5. The directions contained in this circular have been issued under Section 45W of the Reserve Bank of India Act, 1934 and Sections 10(4), 11(1) and 11(2) of the FEMA, 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law.

Yours faithfully,

(Dimple Bhandia)
Chief General Manager