New Delhi: Reserve Bank Governor Shaktikanta Das, in a keynote address at the FIMMDA-PDAI Annual Conference in Barcelona, disclosed the need for Indian banks to be more involved in the rupee derivatives market, both at home and abroad, while staying cautious.
Das pointed out that not many Indian banks are involved in derivative markets, and there are only a few active market-makers. He stressed the importance of increasing Indian players’ participation in both domestic and offshore INR derivative markets.
Das mentioned a key policy change that granted permission to banks to use offshore INR markets for FX derivatives since 2020 and interest rate derivatives since 2022. Banks can only access this if they have an IFSC Banking Unit (IBU). This aims to improve price discovery and provide more opportunities for domestic players. Market-makers can now trade these products outside of domestic market hours.
Das also mentioned that rupee derivatives settled in foreign currency are allowed in Gujarat International Finance Tec-City (GIFT City), through both over-the-counter (OTC) markets and exchanges.
