December 12, 2024 18:22 (IST)
Follow us:
facebook-white sharing button
twitter-white sharing button
instagram-white sharing button
youtube-white sharing button
Amid Atul Subhash row, SC says mere harassment is not enough to prove abetment to suicide | India's D Gukesh becomes youngest ever world champion in chess | Devendra Fadnavis meets PM Modi amid suspense over Maharashtra portfolio allocation | Congress wants to deviate the issue of Sonia Gandhi-George Soros link: JP Nadda | Bengaluru techie suicide: Atul Subhash's family demanded Rs. 10 lakh as dowry leading to my father's death, claims estranged wife | Syria rebels torch tomb of ousted president Bashar al-Assad's father | Donald Trump vows to eliminate birthright citizenship after taking charge | No alliance with Congress in Delhi polls: AAP chief Arvind Kejriwal | Bengaluru techie's suicide: Atul Subhash's wife and her family booked | Bengaluru techie's suicide: Atul Subhash's wife and her family booked
NDDC
Image: wikipedia.org

RBI allows International Banking Units in Gujrat's GIFT City to settle NDDCs in INR

| @indiablooms | Jun 07, 2023, at 05:54 am

Mumbai: The Reserve Bank on Tuesday allowed international banking units (IBUs) located in GIFT City, Gujarat, to settle non-deliverable foreign exchange derivative contracts (NDDCs) using the Indian rupee.

Previously, these derivatives were settled in foreign currency through cash payments.

According to the notification, AD Category-I banks operating IBUs are now allowed to provide NDDCs involving the Indian rupee to non-retail users residing in India for hedging purposes. These transactions will be settled in cash using the Indian rupee.

"The flexibility of cash settlement of NDDCs transactions between two AD Cat-I banks, and between an AD Cat-I bank and a person resident outside India in INR or any foreign currency," it said.

This will help develop the onshore rupee NDDC market and provide residents with the flexibility to efficiently design their hedging programmes, it said.

This move by the RBI will facilitate the growth of the domestic rupee NDDC market and enable residents to effectively structure their hedging strategies.

By allowing banks to offer rupee NDDCs to Indian residents, the RBI aims to reduce any disparities or arbitrage opportunities between domestic and overseas markets.

From June 1, 2020, banks in India operating International Financial Services Centre (IFSC) Banking Units (IBUs) were authorized to engage in rupee Non-Deliverable Derivative Contracts (NDDCs) with non-residents and among themselves. This decision aimed to enhance the financial services offered within the IFSC and promote the development of the rupee NDDC market.

According to the announcement, banks operating IFSC Banking Units (IBUs) will have the flexibility to settle their Non-Deliverable Derivative Contracts (NDDCs) with non-residents and among themselves in either foreign currency or Indian rupee.

However, transactions involving residents will be required to be settled exclusively in Indian rupee.

This flexibility in settlement options aims to facilitate smooth and efficient transactions while ensuring compliance with applicable regulations.

Support Our Journalism

We cannot do without you.. your contribution supports unbiased journalism

IBNS is not driven by any ism- not wokeism, not racism, not skewed secularism, not hyper right-wing or left liberal ideals, nor by any hardline religious beliefs or hyper nationalism. We want to serve you good old objective news, as they are. We do not judge or preach. We let people decide for themselves. We only try to present factual and well-sourced news.

Support objective journalism for a small contribution.