Deadline for banks' FX forward settlement removed for now: sources

MUMBAI (Reuters) - The deadline mandating Indian banks sign agreements to settle FX forward trades via Clearing Corporation of India Ltd (CCIL) has been removed for now, two sources with direct knowledge of the development told Reuters on Thursday.

The Forex Dealers Association of India (FEDAI) informed banks and CCIL in a notification on Tuesday that a previous deadline of March 31 had been postponed, according to the two sources.

Foreign lenders had been reluctant to sign up because of a lack of clarity on rules regarding defaults by a central counterparty and on single borrower limits.

FEDAI's notification also said the body will announce a new implementation date along with revised instructions "in due course of time," the sources said. They declined to be identified as the statement was not made public.

FEDAI officials were not immediately available for comments.

(Reporting by Suvashree Dey Choudhury and Rafael Nam; Editing by Sanjeev Miglani)