RBI proposes to ease foreign exchange rules for banks, dealers
The RBI is looking to loosen up some foreign exchange rules, giving banks and primary dealers more freedom in how they handle things like hedging, balance sheets, and market-making.
They're asking for public feedback on these proposals until March 10, 2026.
What are the proposed changes?
If these changes go through, authorized dealers will be able to do forex deals with each other—including borrowing, lending, and trading rupee derivatives.
They'll also get access to more electronic platforms for forex and interest rate derivatives (even some international ones), making it easier to manage trades.
Plus, a designated bank under the Gold Monetisation Scheme, 2015 and a bank which is allowed to enter into forward gold contracts with its constituents in India may hedge gold price risk using exchange-traded and OTC hedging products in overseas markets, subject to the condition for option products that "there is no net receipt of premium, either direct or implied."
Why this matters
These updates fit right in with the RBI's ongoing reforms—like raising borrowing limits for Indian companies and revising the External Commercial Borrowing framework.
The goal? Make foreign exchange smoother as India's global business keeps growing.
If you care about how money moves across borders or just want a peek at India's financial future, this is worth watching.