The Reserve Bank of India (RBI) on January 05, 2024, issued a circular regarding the Risk Management and Inter-Bank Dealings – Hedging of foreign exchange risk
The following has been stated namely: -
• This has a reference to paragraph 1 of the Statement on Developmental and Regulatory Policies, issued as a part of the Bi-monthly Monetary Policy Statement for 2023-24 dated December 08, 2023, on review of the regulatory framework for hedging of foreign exchange risks.
• This has a further reference to the Foreign Exchange Management (Foreign Exchange Derivative Contracts) Regulations, 2000 dated May 03, 2000 (Notification No. FEMA.25/RB-2000 dated May 03, 2000), as amended from time to time and Master Direction – Risk Management and Inter-Bank Dealings dated July 05, 2016, as amended from time to time.
• It states that the Authorised Dealer Category - I banks shall comply with these for the purpose of exchange-traded currency derivatives, Recognised Stock Exchanges, and Recognised Clearing Corporations, authorized under the Foreign Exchange Management Act, 1999
• It states that the revised Directions have been attached as Annex-I to this circular.
• The revised Directions shall come into effect from April 05, 2024.
[Circular No. RBI/2023-24/108 A. P. (DIR Series) Circular No. 13]
