BANGALORE: The Reserve Bank of India on Thursday issued final rules for a proposed expansion of the country's credit derivative market, after the federal finance minister proposed deepening it in this year's budget.The rules will allow resident Indian non-retail users to deploy instruments such as credit default swaps and total return swaps without any restrictions on purpose, while limiting the use of these instruments by non-resident users for hedging purposes.Here are some of the key rules in the final directions:Retail resident users, except individuals, may undertake credit default swaps only for hedgingThe Reserve Bank of India rejected a request to allow credit derivatives on loansCredit derivative contracts with non-residents may be settled in Indian rupees or a foreign currencyThe rules are applicable with immediate effect.
Reserve Bank of India issues final rules on credit derivatives
The rules will allow resident Indian non-retail users to deploy instruments such as credit default swaps and total return swaps without any restrictions on purpose, while limiting the use of these instruments by non-resident users for hedging purposes.
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