Saturday, August 13, 2011

RBI REVISES BANK DERIVATIVES GUIDELINES


  • Foreign banks accepted operating in India can be market makers for the specific products only if they have the ability to price the products locally in India,.
  • Banks should require compliance officer to submit a monthly report to the board of directors of the banks certifying that all the new features of the guidelines have been followed for all derivative transactions undertaken by the banks.
  • No bank can be market maker in a products it cannot price independently.
  • Before offering derivatives products to clients, banks should obtain resolution of the board of the corporate authorizing the concerned official of company to undertake derivative transactions on behalf of the company.

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