RBI allows Standalone Primary Dealers to participate in Non-Deliverable INR derivatives

The Reserve Bank of India (RBI) has announced a significant policy change permitting Standalone Primary Dealers (SPDs), when authorised as Authorised Dealer Category-III (AD Cat-III), to participate in the non-deliverable Rupee derivative markets (NDDCs). Under existing rules, only Authorised Dealer Category-I (AD Cat-I) banks with an International Financial Services Centre (IFSC) Banking Unit (IBU) were allowed to transact in non-deliverable derivative contracts (NDDCs) involving the Rupee. RBI has expanded eligibility as Standalone Primary Dealers (SPDs), when authorised as Authorised Dealer Category-III (AD Cat-III), can now also transact in Rupee NDDCs. They can offer these transactions to both residents and non-residents.

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