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RBI allows rupee derivatives in IFSC

The central bank also allowed rupee derivatives (with settlement in foreign currency) to be traded in International Financial Services Centres (IFSCs).

ETMarkets.com|
Oct 04, 2019, 01.27 PM IST
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NEW DELHI: The Reserve Bank of India on Friday allowed domestic banks to offer foreign exchange prices to non-residents either by a domestic sales team or through their overseas branches.

The central bank also allowed rupee derivatives (with settlement in foreign currency) to be traded in International Financial Services Centres (IFSCs).

“The directions for implementing recommendations will be issued in consultation with the central government and other regulators. Other recommendations of the committee are under consideration and the decision thereon will be announced in due course,” RBI said in a release.

It also added that RBI has been taking steps for popularising the cross-border transactions in the rupee terms, especially in respect of external commercial borrowings (ECB), trade credit and exports and imports, thereby reducing the exchange risk for persons resident in India.

“Continuing these efforts, it has been decided, in consultation with the Government of India, to enhance the scope of non-interest bearing Special Non-resident Rupee (SNRR) Account by permitting persons resident outside India to open such accounts to facilitate rupee denominated ECB, trade credit and trade invoicing. Further, restriction on the tenure of SNRR account, which is currently 7 years, is also proposed to be removed. Guidelines in this regard would be issued within a month,” RBI said.

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