RBI
RBI Bans Rebooking of Cancelled INR Forex Derivatives, Slashes Position Limits
11 October 2026 · RBI
The RBI has prohibited rebooking of cancelled INR derivative contracts and reduced the no-underlying position limit from USD 100 million to USD 5 million. A user undertaking to prevent duplicate hedging is now mandatory.
Points to Remember
- Authorised Dealers cannot allow rebooking of any INR forex derivative contract that has been cancelled.
- The threshold for taking positions without establishing underlying exposure is reduced to USD 5 million from USD 100 million.
- An undertaking from the user is required to confirm the same underlying exposure is not hedged with another Authorised Dealer.
- Authorised Dealers must retain necessary documents for at least two years to ensure compliance.
- Rollovers of derivative contracts on maturity are still permitted under existing Master Direction rules.
Why it matters
Clients with large forex derivative positions will face tighter limits and cannot re-enter cancelled contracts, requiring more careful planning and documentation for hedging activities.
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