RBI adds NBFCs and PDs as market makers in rupee interest rate derivative segment

The Reserve Bank of India released draft guidelines to govern rupee interest rate derivatives (IRD) transactions in India, with an aim to reduce compliance burden. The RBI also added non bank finance companies (NBFCs) and primary dealers (PDs) as market participants with an aim to bring fairer prices to clients.

According to the draft circular, market participants will have to report all over the counter (OTC) IRD transactions they undertake directly or through overseas entities.

Details like notional value, counterparty and maturity details, interest rate terms, purpose of the trade and unwinding details would have to be reported to the exchange platform.


Market timings for undertaking an exchange-traded IRD transaction would be specified by the Securities and Exchange Board of India (SEBI), in consultation with the Reserve Bank, the draft said. This draft will come into three months after the final guidelines are issued.