RBI push pays off as offshore currency trading starts trickling in onshore

Target is to bring 25% of offshore volume to IFSC by December

The Reserve Bank of India’s (RBI’s) effort to bring offshore derivative trading onshore is slowly showing results, at least when it comes to exchange-traded derivative products.  

But the non-deliverable futures (NDF) segment, the main concern of the regulator, is an over-the-counter (OTC) instrument, where the data is private and only available with banks, Clearing Corporation of India and the RBI.

The offshore volume — on which the central bank has almost no control — in NDF OTC is more than the onshore volume. To allow some of the trades to happen onshore, the central bank, from June 1, allowed local banks with