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

Reserve Bank of India (Margin for Derivative Contracts) Directions, 2024

08-May-2024 | RBI/2024-25/34 A. P. (DIR Series) Circular No.05

RBI has issued Reserve Bank of India (Margin for Derivative Contracts) Directions, 2024 applicable on Authorised Dealer Category-I (AD Cat-I) banks and
Authorised Dealer Category - III Standalone Primary Dealers (AD Cat-III SPDs).

Key highlights: -

1. Authorised Dealers may post and collect margin in India and outside India for permitted derivative contract entered into with a person resident outside India and receive and pay interest on such margin.

2. Authorised Dealers may post and collect margin, in India and outside India, for derivative transactions of their overseas branches and IFSC Banking Units and receive and pay interest on such margin.

3. Authorised Dealer Category-I banks may post and collect margin, in India and outside India, on behalf of their customers for a permitted derivative contract entered into with a person resident outside India and receive and pay interest on such margin.

4. Margin posted and collected in India shall be in the form of Indian currency, Freely convertible foreign currency, Debt securities issued by Indian Central Government and State Governments etc.

5. Margin posted and collected outside India shall be in the form of Freely convertible foreign currency and Debt securities issued by foreign sovereigns with a credit rating of AA- and above.

6. Authorised Dealer Category-I banks shall maintain a separate account in the name of persons resident outside India for the purpose of posting and collecting cash margin in India, and transactions incidental thereto.

For more information, please refer the attachment.

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