RBI relaxes some forex option premium payment rules

Allows buyers to spread premium payment over the maturity of the contract

The RBI on Tuesday relaxed premium payment rules on some forex options by allowing the buyer of the option to spread the premium payment over the maturity of the contract.

This facility will be available for cost reduction forex option structures in which the liability of the buyer will not exceed the net premium payable to the bank, the Reserve Bank of India said.

The premium payment should be made at least once a quarter, the central bank said.