Risk Management and Inter-Bank Dealings - Commodity Hedging

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..... ay 3, 2000 , as amended from time to time, A.P. (DIR Series) Circular No.03 dated July 23, 2005 and A.P. (DIR Series) Circular No.66 dated May 31, 2007 . Currently, residents in India are permitted to hedge their commodity price risk after obtaining specific approvals from the Reserve Bank or from select ADs which have been authorised by the Reserve Bank for the purpose. 2. In view of the volat .....

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..... edges may be undertaken using over-the-counter (OTC) / exchange traded derivatives overseas with the tenor restricted to a maximum of one-year forward. 4. AD Category - I banks should ensure that the entities hedging their exposures should have Board approved policies which define the overall framework within which derivatives activities should be undertaken and the risks contained. AD Category .....

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..... with. All transactions should be routed only through a designated AD Category - I bank. 6. Applications from customers to undertake hedge transactions not covered under the delegated authority may continue to be forwarded to Reserve Bank by the AD Category - I banks, for approval as hitherto. 7. AD Category - I banks may bring the contents of the circular to the notice of their constituents .....

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