 "rbi reserve bank of india")
The Reserve Bank of India (RBI) on Friday said non-residents could open accounts through authorised dealers for collecting margin money for derivative contracts.
They can open accounts in both foreign currencies and the rupee, said a notification by the central bank.
Market participants, however, have indicated this is unlikely to have a significant impact.
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“This will not have a major impact because it is just adjustment in regulations,” said a senior executive at a brokerage.
But the introduction of a dedicated account for margin requirements would enhance efficiency in managing margin obligations and associated funds for non-residents participating in permitted derivative contracts.
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The government of India has published a notification in the Gazette dated May 6, 2024.
“It will lead to better management of funds and make it easier for foreign investors to do trades. Apart from that, I don’t see any impact,” said an executive at another brokerage.
“An authorised dealer in India may allow a person resident outside India to open, hold and maintain an interest bearing account in Indian Rupees and/or foreign currency for the purpose of posting and collecting margin in India, for a permitted derivative contract entered into by such person,” said the notification.
Currently, the RBI permits interest-rate derivatives such as interest-rate swaps, forward-rate agreements, and interest-rate futures, as well as foreign-currency derivatives including foreign-currency forwards, currency swaps, and currency options. Similarly, in the equity domain, permissible derivative contracts encompass forward contracts, futures contracts, options contracts, and swap contracts.
