RBI Finalises Reporting Norms for FX Derivative Deals by AD-I Banks

The Reserve Bank of India has finalised its directions on reporting foreign exchange derivative transactions involving the Indian rupee. These directions apply to Authorised Dealer Category-I banks and focus on transactions undertaken by their related parties overseas.

The move is aimed at enhancing transparency and oversight in the foreign exchange market. The final framework builds on feedback received after the draft was issued earlier in 2026.

Background of the Draft Directions

The RBI released draft directions titled “Reporting Instructions for Authorised Dealer Category-I Banks” on February 16, 2026. The draft sought views from market participants, stakeholders, and other interested parties on proposed reporting requirements.

The objective was to standardise and strengthen data reporting related to foreign exchange derivatives linked to INR. Such consultations are part of the RBI’s process to ensure clarity and practicality before final implementation.

Key Reporting Requirement Introduced

Under the final directions, AD Category-I banks are required to report certain foreign exchange derivative transactions to the Trade Repository of the Clearing Corporation of India Limited. The reporting requirement specifically covers derivative transactions involving INR that are undertaken by related parties of these banks at a global level.

This measure is designed to improve visibility into offshore and cross-border derivative exposures linked to the Indian currency. Centralised reporting through CCIL is expected to support more effective market monitoring.

Feedback and Regulatory Modifications

The RBI examined the feedback received from various stakeholders on the draft framework. Based on this assessment, modifications were incorporated into the final directions to address concerns raised during the consultation phase.

The regulator stated that a summary of the major feedback and corresponding responses has been provided in an annex to the final directions. This approach reflects an attempt to balance regulatory objectives with operational feasibility for reporting entities.

Operational Aspects and CCIL’s Role

Some feedback focused on reporting formats, technical fields, and operational processes associated with data submission. The RBI clarified that such operational inputs have been shared with CCIL for further examination.

CCIL, as the trade repository, will play a central role in designing and refining reporting mechanisms. Coordination between banks and CCIL is expected to be critical for smooth implementation.

Read More: RBI Proposes New Rules for Digital Wallets.

Conclusion

The finalisation of reporting instructions marks another step in the RBI’s efforts to strengthen oversight of the foreign exchange derivatives market. By requiring systematic reporting of INR-linked derivative transactions undertaken globally by related parties, the framework aims to enhance transparency.

The incorporation of stakeholder feedback highlights the consultative nature of the regulatory process. Overall, the directions seek to improve data quality and market visibility without altering underlying trading activity.

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