{"id":101860,"date":"2020-09-30T09:54:35","date_gmt":"2020-09-30T09:54:35","guid":{"rendered":"https:\/\/www.edristi.in\/?p=101860"},"modified":"2020-09-30T09:54:37","modified_gmt":"2020-09-30T09:54:37","slug":"rbi-draft-on-rupee-interest-rate-derivatives","status":"publish","type":"post","link":"https:\/\/www.edristi.in\/hi\/%e0%a4%b9%e0%a5%8b%e0%a4%ae\/rbi-draft-on-rupee-interest-rate-derivatives\/","title":{"rendered":"RBI draft on Rupee interest rate derivatives"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\"><strong>Question : The Reserve Bank on Tuesday proposed allowing foreign portfolio investors (FPIs) to undertake exchange-traded rupee interest rate derivatives transactions subject to an overall ceiling of &#8212;<br><\/strong>(a) Rs 5,000 crore.<br>(b) Rs 7,000 crore.<br>(c) Rs 8,000 crore.<br>(d) Rs 9,000 crore.<br><strong>Answer (a)<br>Related facts<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>The Reserve Bank on Tuesday(15 September 2020) proposed allowing foreign portfolio investors (FPIs) to undertake exchange-traded rupee interest rate derivatives transactions subject to an overall ceiling of Rs. 5,000 crore.<\/li><li>Interest Rate Derivatives (IRD) are contracts whose value is derived from one or more interest rates, prices of interest-rate instruments, or interest rate indices.<\/li><li>The proposed Rupee Interest Rate Derivatives (Reserve Bank) Directions, 2020 are aimed at encouraging higher non-resident participation, enhance the role of domestic market makers in the offshore market, improve transparency, and achieve better regulatory oversight, according to the RBI.<\/li><li>FPIs may transact in permitted exchange-traded IRDs subject to the conditions that, at any point in time \u201cthe net long position of FPIs, collectively, and across all exchanges, in exchange-traded IRDs shall not exceed Rs 5,000 crore\u201d, the draft regulations suggested.<\/li><li>Also, the net short position of an FPI on exchange-traded IRDs should not exceed its long position in government securities and other rupee debt securities.<\/li><li>The draft further said for the purpose of offering Rupee IRD contracts to a user, the market-maker (entities which provide bid and offer prices to users in order to provide liquidity to the market) should classify the user either as a retail user or as a non-retail user.<\/li><li>Non-retail users, as per the draft, are entities regulated by RBI, SEBI, IRDAI or PFRDA; resident companies with a minimum net worth of Rs 500 crore; and non-residents, other than individuals.<\/li><li>\u201cAny user who is not eligible to be classified as a non-retail user shall be classified as a retail user,\u201d it said.<\/li><\/ul>\n\n\n\n<p class=\"has-text-align-right wp-block-paragraph\"><strong>By &#8211; Pankaj Pandey<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Link:<\/strong><br><a href=\"https:\/\/www.financialexpress.com\/industry\/banking-finance\/rbi-issues-draft-rupee-interest-rate-derivatives\/2084058\/\" target=\"_blank\" rel=\"noreferrer noopener\">https:\/\/www.financialexpress.com\/industry\/banking-finance\/rbi-issues-draft-rupee-interest-rate-derivatives\/2084058\/<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Question : The Reserve Bank on Tuesday proposed allowing foreign portfolio investors (FPIs) to undertake exchange-traded rupee interest rate derivatives transactions subject to an overall ceiling of &#8212;(a) Rs 5,000 crore.(b) Rs 7,000 crore.(c) Rs 8,000 crore.(d) Rs 9,000 crore.Answer (a)Related facts The Reserve Bank on Tuesday(15 September 2020) proposed allowing foreign portfolio investors (FPIs) [&hellip;]<\/p>\n","protected":false},"author":9,"featured_media":101861,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1089],"tags":[2338],"class_list":["post-101860","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-enew","tag-economics"],"_links":{"self":[{"href":"https:\/\/www.edristi.in\/hi\/%e0%a4%b9%e0%a5%8b%e0%a4%ae\/wp-json\/wp\/v2\/posts\/101860","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.edristi.in\/hi\/%e0%a4%b9%e0%a5%8b%e0%a4%ae\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.edristi.in\/hi\/%e0%a4%b9%e0%a5%8b%e0%a4%ae\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.edristi.in\/hi\/%e0%a4%b9%e0%a5%8b%e0%a4%ae\/wp-json\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/www.edristi.in\/hi\/%e0%a4%b9%e0%a5%8b%e0%a4%ae\/wp-json\/wp\/v2\/comments?post=101860"}],"version-history":[{"count":1,"href":"https:\/\/www.edristi.in\/hi\/%e0%a4%b9%e0%a5%8b%e0%a4%ae\/wp-json\/wp\/v2\/posts\/101860\/revisions"}],"predecessor-version":[{"id":101862,"href":"https:\/\/www.edristi.in\/hi\/%e0%a4%b9%e0%a5%8b%e0%a4%ae\/wp-json\/wp\/v2\/posts\/101860\/revisions\/101862"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.edristi.in\/hi\/%e0%a4%b9%e0%a5%8b%e0%a4%ae\/wp-json\/wp\/v2\/media\/101861"}],"wp:attachment":[{"href":"https:\/\/www.edristi.in\/hi\/%e0%a4%b9%e0%a5%8b%e0%a4%ae\/wp-json\/wp\/v2\/media?parent=101860"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.edristi.in\/hi\/%e0%a4%b9%e0%a5%8b%e0%a4%ae\/wp-json\/wp\/v2\/categories?post=101860"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.edristi.in\/hi\/%e0%a4%b9%e0%a5%8b%e0%a4%ae\/wp-json\/wp\/v2\/tags?post=101860"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}