The Reserve Bank of India (RBI) released a new series of draft instructions on Monday that were aimed at updating the rules for rupees interest rates (IRD), in a movement that is designed to bring the regulatory framework in accordance with evolving market practices and raised participation of non-entities.The current framework, last revised in June 2019, will be overhauled to display the changes in the financial landscape, including the introduction of new products and an increase in the involvement of non-residents in the market.“Accordingly, an extensive evaluation of the IRD directions and the draft instructions are willing to match the market and other related developments,” said the RBI during the release of the design -master direction, reserve Bank of India (rupee interest rate divants) instructions, 2025.Interestivatives refer to financial contracts whose value is based on one or more rupee interest rate, prices of rupid -interest rates or rupees interest rate indices.Under the proposed changes, the design of non-residents enables IRD transactions to carry out IRD transactions through their central treasury or group entities, where applicable. However, market makers must ensure that such entities are properly authorized to act on behalf of the end user.The concept also proposes to simplify existing reporting requirements, aimed at alleviating the compliance tax on market participants. Moreover, the APEX Bank is planning to introduce a new mandate that requires the report of rupid transactions that were carried out worldwide, in an attempt to improve transparency on the market.On July 7, 2025, the RBI invited feedback from banks, market participants and other interested parties to the design.
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