Press Release no. 2025-2026/2130; Dated: 17.02.2026
The RBI has released draft directions on foreign exchange dealings of Authorised Persons. As per the directions, an authorised dealer (AD) may undertake certain foreign exchange transactions with other ADs and with its overseas branches/entities/IFSC banking units (IBUs)/Offshore Banking Units (OBUs) in Special Economic Zones for the purpose of hedging its exposures, balance sheet management, market making and proprietary positions.
Further, an authorised dealer may undertake non-deliverable derivative contracts (NDDCs) involving INR with other Authorised Dealers and with overseas entities/IBUs/OBUs in Special Economic Zones either directly or on a back-to-back basis through their overseas branches (in case of foreign banks operating in India, through any branch of the parent bank), IBUs, overseas wholly owned subsidiaries and overseas joint ventures, subject to the following conditions:
(a) NDDCs involving INR can be undertaken by an Authorised Dealer Category-I bank, subject to the condition that the Authorised Dealer Category-I bank (or its non-resident parent bank) has an operating IBU;
(b) Such transactions may be undertaken by the wholly owned subsidiary/joint venture of Authorised Dealers incorporated in India, provided the wholly owned subsidiary/joint venture is a banking entity; and
(c) Such transactions may be cash-settled in INR or any foreign currency.
Also, the draft directions cover norms relating to exchange-traded transactions, hedging of gold prices, foreign currency accounts and investments in overseas markets, governance and risk management and market timings.
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