RBI asks banks to report overseas rupee OTC derivative contracts to CCIL

New Delhi: The RBI on Monday asked banks to report all over-the-counter (OTC) foreign exchange derivative contracts involving the rupee undertaken globally by their related parties to Clearing Corporation of India, while providing them certain operational flexibility.

In a move aimed at improving transparency in the derivatives market, the central bank has issued directions on 'Reporting Instructions for Authorised Dealer Category – I Banks'.

Follow The PSUWatch Channel on WhatsApp

OTC derivatives mean derivatives other than those which are traded on stock exchanges and include those traded on electronic trading platforms.

An AD Cat-I bank will have to report the necessary details of the OTC foreign exchange derivative contracts involving INR undertaken by its offshore related parties to the Trade Repository (TR) of Clearing Corporation of India (CCIL), RBI said in a circular.

"All OTC deliverable and non-deliverable foreign exchange derivative contracts involving INR, undertaken globally by the related parties of the AD Cat-I bank in India shall be reported," it said.

Providing operational flexibility to the banks, RBI said they will have the option of not reporting transactions where the notional of the contract does not exceed USD 1 million or equivalent.

They will also not be required to report transactions undertaken in terms of the back-to-back arrangement and transactions undertaken by the related parties with other AD Cat-I banks in India.

As part of the flexibility, the central bank has also laid down a phased roadmap for the reporting.

Follow PSU Watch on LinkedIN

The circular said that from July 1, 2027, banks will have to report all foreign exchange derivative contracts involving INR undertaken by their parent, including the branches of the parent.

Reporting coverage for other related parties should reach at least 70 per cent of the notional value by July 2027, 80 per cent by January 2028, and 100 percent by July 2028.

According to the circular, transaction will have to be reported preferably on the date of transaction, but in any case, within two working days from the date of transaction.

(PSU Watch– India's Business News centre that places the spotlight on PSUs, Bureaucracy, Defence and Public Policy is now on Google News. Click here to follow. Also, join PSU Watch Channel in your Telegram. You may also follow us on Twitter here and stay updated.)