The Reserve Bank of India (RBI) on October 12, 2026, issued a notification regarding the restrictions on INR-linked non-deliverable derivative contracts and Foreign Exchange Risk Reserve (FERR).
The following has been stated: -
•The Authorised Dealers shall offer INR-linked NDDCs to non-resident users only for hedging purposes.
•Authorised Dealers must maintain FERR for INR-linked foreign exchange derivative contracts undertaken to hedge their own assets and liabilities, where they purchase foreign currency against INR.
•The reserve shall equal 20% of the INR equivalent of the notional amount of each contract and must be maintained in cash with the RBI in India daily until contract termination.
•These directions apply to foreign exchange derivative contracts undertaken after their issuance.
[Notification No.: RBI/2026-27/293 A.P. (DIR Series) Circular No. 27]
