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Corporate Laws Central Ministry of Finance Reserve Bank of India Act, 1934

Master Direction - Reserve Bank of India (Rupee Interest Rate Derivatives) Directions, 2025

08-Dec-2025 | RBI/FMRD/2025-26/380 FMRD.DIRD.No.06/14.03.046/2025-26

RBI has issued Master Direction titled Reserve Bank of India (Rupee Interest Rate Derivatives) Directions, 2025 effective from 01st March 2026. Key Highlights: 1. Participants - Both residents and non-residents can participate, with non-residents allowed to operate through authorised central treasury/group entities. 2. Applicability - Stock exchanges may offer standardised IRD (interest rate derivatives) products with RBI approval. FPIs can trade in Interest Rate Futures within prescribed long/short position limits. 3. OTC Market-Makers - Only certain entities can act as market-makers like Scheduled Banks, SPDs, NBFC-ULs, EXIM Bank, NABARD, NHB, SIDBI, NaBFID. 4. User Classification - Users are classified as retail or non-retail. Non-retail includes institutions like NBFCs, insurers, pension funds, mutual funds, AIFs, large corporates (Rs.500 cr net worth/Rs.1000 cr turnover), and non-resident entities. 5. Rules for Non-Resident Transactions - a. Market-makers may transact directly or via back-to-back arrangements through eligible overseas entities. b. Non-resident speculative positions (non-hedging) are capped: total PVBP (Price Value of a Basis Point) limit = Rs.1,000 crore, monitored daily by CCIL. 6. Reporting Requirements - Market-makers must report all IRD transactions (including offshore related-party trades) to the CCIL Trade Repository within defined timelines. Unwinding/novation must also be reported. 7. Compliance & Enforcement - a. Participants must follow applicable prudential norms, accounting standards, and market-abuse rules. b. RBI may seek information anytime and may bar participants for up to one month for violations. Pre-existing IRD contracts continue under old rules until maturity. For more information, please refer to the attached document.

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