RBI issues draft rules to ease banks' derivatives risk management
The Reserve Bank of India (RBI) is rolling out draft rules to make it easier for banks to measure and manage the risks when they trade derivatives, those complex financial contracts you hear about in finance news.
The new guidelines are open for public feedback until July 1, 2026, and will kick in from April 1, 2027.
This move is all about keeping Indian banking practices in sync with global standards.
RBI draft includes margin netting guidance
The proposals cover a range of financial products: think over-the-counter (OTC) and exchange-traded derivatives, securities financing deals, and long-settlement trades.
There's also clearer guidance on how banks should handle multiple margin agreements and multiple netting sets.
Plus, the RBI clarifies how banks can compute effective notional for options and provides disclosure templates for the standardized approach to counterparty credit risk.
Banks, market players, and anyone interested can share their thoughts before the deadline.