Task Force On Offshore Rupee Markets Submits Report To RBI Governor

The Task Force interacted with representatives of various banks, financial institutions, large corporates in India and abroad, foreign portfolio investors, asset managers, industry bodies, experts and practitioners. The key recommendations of the Task Force are to extend onshore market hours to improve access of overseas users, to permit Indian banks to freely offer prices to global clients around the clock, to enable Rupee derivatives (settled in foreign currency), to be traded in the International Financial Services Centers (IFSC) in India, to begin with on exchanges in the IFSC, to allow users to undertake forex transactions up to USD 100 million in OTC currency derivative market without the need to establish underlying exposure and to facilitate non-residents to hedge their foreign exchange exposure onshore by establishing a central clearing and settlement mechanism for non-resident transactions in the onshore market. It is also set to focus on implementing margin requirement for non-centrally cleared OTC derivatives and allowing Indian banks to post margins abroad, aligning the tax treatment of foreign exchange derivatives with that in major international centres and Centralising the KYC requirements across financial markets with uniform documentation requirement.

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