The Reserve Bank of India (RBI) has allowed Authorised Dealer (AD) Category-I Banks to post and collect margin in India, on their own account or on behalf of their customers, for a permitted derivative contract entered into with a person residing outside India. The AD Cat-I Banks can post and collect margin in the form of Indian currency; freely convertible foreign currency; debt securities issued by Indian Central government and State governments; and rupee bonds issued by persons residing in India.
AD Cat-I banks may post and collect such margin outside India in the form of freely convertible foreign currency and debt securities issued by foreign sovereigns with a credit rating of AA- and above issued by S&P Global Ratings / Fitch Ratings or Aa3 and above issued by Moody's Investors Service. If different ratings are accorded by two or more credit rating agencies, then the lowest rating shall be reckoned. AD Cat-I banks may receive and pay interest on margin posted and collected on their own account or on behalf of their customers for a permitted derivative contract entered into with a person resident outside India. AD Cat-I banks shall maintain a separate account in the name of persons resident outside India for the purpose of posting and collecting cash margin in India, and transactions incidental thereto.
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