Risk Management and Inter-Bank Dealings - Non-deliverable derivative contracts (NDDCs)

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... n Exchange Derivative Contracts) Regulations, 2000 dated May 3, 2000 ( Notification No. FEMA.25/RB-2000 dated May 3, 2000 ), as amended from time to time, and Master Direction Risk Management and Inter-Bank Dealings dated July 5, 2016, as amended from time to time. 2. As per the extant regulatory framework, AD Cat-I banks operating International Financial Services Centre (IFSC) Banking Units (IBUs) are permitted to offer non-deliverable derivative contracts (NDDCs) to persons resident outside India. Such derivatives are cash-settled in foreign currency. With a view to developing the onshore INR NDDC market and providing residents the flexibility to efficiently design their hedging programmes, it has been decided to permit: (a) AD C .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ery of the notional amount of the underlying currencies of the contract and which is cash settled. The opening sentences of the existing para 2(A)(ii) of Part-A (Section-I), shall be substituted ii. Authorised Dealers shall offer derivative contracts to a user as per the user s classification in para (i) above. While offering a derivative contract involving INR, other than NDDCs, to a user, and during the life of such contracts, Authorised Dealers shall ensure that: Authorised Dealers shall offer derivative contracts to a user as per the users classification in para (i) above. While offering a derivative contract involving INR to a user, other than NDDCs of .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... anch of the parent bank). Such transactions can be cash-settled in INR or any foreign currency. A new para shall be inserted after the existing para 2(A)(x) of Part-A (Section-I) iv. - xi. Banks in India having an Authorised Dealer Category-I license under FEMA, 1999, and operating IBUs shall also be eligible to offer NDDCs involving INR to resident non-retail users from their branches in India subject to compliance with the directions set out in para 2A(ii) above. Such transactions shall be cash-settled in INR. The existing para 3A of Part C, shall be substituted. v. Authorised dealers having an IFSC Bank .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X