The Reserve Bank of India (RBI) on June 05, 2026, issued the update to the Master Direction – Reporting under the Foreign Exchange Management Act, 1999.
The following has been stated:
• It has updated the Master Direction to strengthen prudential safeguards in the foreign exchange derivatives market. The key changes relate to transactions involving the Indian Rupee (INR) and obligations of Authorised Dealers (ADs).
• The revised directions prohibit Authorised Dealers from offering non-deliverable INR derivative contracts to both resident and non-resident users. However, deliverable foreign exchange derivative contracts may continue to be offered for genuine hedging purposes, provided the user does not maintain offsetting non-deliverable derivative positions. ADs may seek information and documents from customers to verify compliance.
• The RBI has also barred rebooking of cancelled INR-linked derivative contracts, whether deliverable or non-deliverable, after cancellation
[Notification no. - RBI/FED/2015-16/13 FED Master Direction No.18/2015-16]
