On December 28 the Reserve Bank of India (RBI) issued final guidelines concerning over-the-counter foreign exchange (FX) derivatives, effective immediately.
The message from these new rules is clear: the central bank will not tolerate corporates irresponsibly speculating on currency and will not allow banks to court them with a vast array of derivatives products.
If the RBI’s diktat had come out before the financial crisis, the banks would have been in uproar at how draconian it was.
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