RBI Proposes New Reporting Norms for Enhanced Transparency in Forex Derivatives

The RBI has proposed draft norms for banks to report all global foreign exchange derivative transactions involving the rupee. This move aims to enhance transparency and improve pricing decisions by market participants. The bank invites feedback on the draft by March 9.

The Reserve Bank of India (RBI) has unveiled draft norms that require banks to report foreign exchange derivative transactions involving the Indian rupee conducted by related parties globally. This initiative is designed to aid market participants in making more informed pricing decisions.

Historically, the markets for OTC foreign exchange, interest rate, and credit derivatives have seen several measures aimed at enhancing transparency. Despite these efforts, a significant number of offshore rupee derivative transactions remain unreported, creating a transparency gap. In October 2022, primary dealers began reporting all rupee derivative transactions undertaken by global related parties, a requirement extended to banks for rupee interest rate derivative transactions in December 2025.

This latest proposal stipulates that Authorized Dealer Category-I banks must report pertinent transaction details, including notional value, counterparty name, maturity date, and currency. The central bank solicits comments from stakeholders and relevant parties on these draft directions by March 9.

(With inputs from agencies.)