ARTICLE · 18 JANUARY 2024

AKP Banking & Finance Digest- January 15, 2024

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The Reserve Bank of India ("RBI") has issued the revised guidelines on ‘Risk Management and Inter-Bank Dealing-Hedging of foreign exchange risk' ("Guidelines").

GlobalFinance and Banking

1. Regulatory Updates

1.1. India

1.1.1. RBI issues revised guidelines on Forex Risk Hedging

The Reserve Bank of India ("RBI") has issued the revised guidelines on 'Risk Management and Inter-Bank Dealing-Hedging of foreign exchange risk' ("Guidelines"). The Guidelines empower Authorized Dealers ("AD") to categorize users as retail or non-retail, allowing them to provide forex derivative contracts and foreign currency interest rate derivative contracts accordingly. ADs are now authorized to offer various foreign exchange contracts involving Indian National Rupee or other currencies to both retail and non-retail users for cash, tom, and spot transactions. The Guidelines clearly define essential terms and classify users into retail and non-retail categories, specifying the eligibility criteria and access to different derivative contracts for each group. Furthermore, the Guidelines outline specific instructions for hedging, rebooking of contracts, and

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