The Reserve Bank Governor Shaktikanta Das on Monday stressed the need for greater participation of Indian banks in rupee derivatives market, both domestically and offshore, while being prudent. RBI Governor stated that participation of domestic banks in derivative markets remains limited with only a small set of active market-makers. Going forward, he said thatour focus should be on enhancing and widening the participation of Indian players in markets for INR derivatives, both domestically and offshore, while being prudent.
A significant policy initiative has been to permit the banks to access offshore INR markets for (i) FX derivatives (in 2020) 30, subject to the presence of an operating IFSC Banking Unit (IBU); and (ii) for interest rate derivatives (in 2022)31 with a view to improve the efficiency of price discovery and provide greater opportunities to domestic participants, Das said in his keynote address at the FIMMDA-PDAI Annual Conference in Barcelona. Market-makers have been permitted to deal in such products beyond domestic markets hours. Rupee derivatives settled in foreign currency have also been permitted in GIFT City, both through OTC markets and on the exchanges, he noted.
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