The Reserve Bank of India (RBI) on May 08, 2024, issued the Master Direction on the Reserve Bank of India (Margining for Non-Centrally Cleared OTC Derivatives) Directions, 2024.
The following has been stated namely: -
• The following entities shall be classified as Domestic Covered Entities for exchange of Variation Margin: -
o Entities regulated by a financial sector regulator (including branches of foreign banks operating in India) and having an Average Aggregate Notional Amount (AANA) of outstanding NCCDs of ₹ 25,000 crore and above, on a consolidated group wide basis.
o Other resident entities having an AANA of outstanding NCCDs of ₹ 60,000 crore and above, on a consolidated group wide basis
• The following entities shall be classified as Foreign Covered Entities for exchange of Variation Margin: -
o Non-resident financial entities having an AANA of outstanding NCCDs of USD 3 billion and above, on a consolidated group wide basis.
o Other non-resident entities having an AANA of outstanding NCCDs of USD 8 billion and above, on a consolidated group wide basis.
• The provisions of these Directions shall apply to the following namely: -
o Non-centrally cleared foreign exchange derivative contracts
o Non-centrally cleared interest rate derivative contracts
o Non-centrally cleared credit derivative
o Any other non-centrally cleared derivative (NCCD) contract as may be specified by the Reserve Bank.
This shall come into force on November 08, 2024.
[Notification No. RBI/2024-25/117]
