The Reserve Bank of India (RBI) has released draft guidelines for banks to report foreign exchange derivative transactions involving the rupee by their related parties. The RBI has been working on increasing transparency in over-the-counter (OTC) markets for foreign exchange, interest rate, and credit derivatives. Currently, all OTC derivative transactions are reported to the trade repository of the Clearing Corporation of India Limited (CCIL) by market-makers. The central bank highlighted a lack of transparency persists due to many offshore rupee derivative transactions not being reported. The RBI stated that this increased transparency would facilitate better pricing decisions for market participants. According to the draft directions, Authorised Dealer Category-I banks will need to report all relevant elements of covered transactions. This includes details like notional value, counterparty name, maturity date, and currency specifications.
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