The Reserve Bank of India (RBI), on April 20, 2026, issued a circular withdrawing earlier instructions dated April 01, 2026, and revising norms relating to risk management and inter-bank dealings. The circular restricts Authorised Dealers from undertaking any foreign exchange derivative contracts involving INR with related parties.
However, limited exceptions have been provided, including cancellation or rollover of existing contracts and back-to-back transactions with non-related non-resident users in line with the existing Master Direction on Risk Management and Inter-Bank Dealings. The definition of “related parties” shall be as per Indian Accounting Standard 24 or International Accounting Standard 24.
These directions are effective immediately and have been issued under the provisions of the Foreign Exchange Management Act, 1999, specifically Sections 10(4), 11(1), and 11(2), governing RBI’s regulatory powers over foreign exchange transactions.
[Notification No. RBI/2026-27/14]
