Reserve Bank Drafts Easier Forex Norms, Offering Flexibility to Authorised Dealers
The RBI suggested a new set of forex rules that are less strict and provide authorized dealers with more flexibility. Through a press release, the bank has issued a formal statement.
According to a press release, the Reserve Bank of India published draft instructions for the new foreign exchange regulations pertaining to authorized forex traders on Tuesday, stating that the draft offers them greater flexibility.
The RBI’s draft also seeks to lower reporting requirements mandates and control risks and exposures pertaining to foreign exchange transactions between banks. According to the draft, “Authorised persons shall mean authorized dealer category-I banks and standalone primary dealers authorized as authorized dealer category-III.”
Additionally, it details how approved dealers may carry out several forex and derivative transactions, including those with foreign branches and organizations, in accordance with the regulatory guidelines established in the draft. The draft states, “The revised framework provides these authorized dealers with greater flexibility with respect to foreign exchange products, risk management and platforms.”
The central bank has also suggested that licensed dealers be permitted to enter into non-deliverable derivative contracts involving the Indian rupee with other licensed dealers.
Moreover, electronic trading platforms approved by the RBI may be used to conduct foreign exchange and foreign currency interest rate derivative transactions.
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