{"id":502,"date":"2021-02-16T06:06:18","date_gmt":"2021-02-16T06:06:18","guid":{"rendered":"https:\/\/rvkassociates.com\/blog\/?p=502"},"modified":"2021-02-17T10:51:20","modified_gmt":"2021-02-17T10:51:20","slug":"rbi-2020-21-circular-no-10-margin-for-derivative-contracts","status":"publish","type":"post","link":"https:\/\/rvks.in\/blogs\/rbi-2020-21-circular-no-10-margin-for-derivative-contracts\/","title":{"rendered":"RBI , 2020-21 ,Circular No.10 , Margin for Derivative Contracts."},"content":{"rendered":"\n

February 15, 2021<\/p>\n\n\n\n

All Authorised Dealer Category-I Banks<\/p>\n\n\n\n


Madam\/Sir,<\/p>\n\n\n\n

Margin for Derivative Contracts<\/strong><\/p>\n\n\n\n

Attention of Authorised Dealer Category-I (AD Cat-I) banks is invited to the Foreign Exchange Management (Margin for Derivative Contracts) Regulations, 2020 notified in the Gazette of India vide notification no. FEMA.399\/RB-2020 dated October 23, 2020 (Annex I). Accordingly, directions are being issued to allow posting and collection of margin for permitted derivative contracts between a person resident in India and a person
resident outside India<\/p>\n\n\n\n

  1. 2. AD Cat-I banks may post and collect margin in India, on their own account or on behalf of their customers, for a permitted derivative contract entered into with a person resident outside India in the form of:
    1. (i)<\/strong> Indian currency;<\/li>
    2. (ii)<\/strong> Freely convertible foreign currency;<\/li>
    3. (iii)<\/strong> Debt securities issued by Indian Central Government and State Governments;<\/li>
    4. (iv)<\/strong> Rupee bonds issued by persons resident in India which are:
      1. (a)<\/strong> Listed on a recognized stock exchange in India; and<\/li>
      2. (b)<\/strong> Assigned a credit rating of AAA issued by a rating agency registered with the Securities and Exchange Board of India. If different ratings are accorded by two or more credit rating agencies, then the lowest rating shall be reckoned.<\/li><\/ol><\/li><\/ol><\/li>
      3. Explanation: Permitted derivative contract shall have the same meaning as assigned to it in the Foreign Exchange Management (Margin for Derivative Contracts) Regulations, 2020 [Notification no. FEMA.399\/RB-2020 dated October 23, 2020].<\/li><\/ol>\n\n\n\n

        3. AD Cat-I banks may post and collect such margin outside India in the form of:
        (i)<\/strong> Freely convertible foreign currency; and
        (ii)<\/strong> Debt securities issued by foreign sovereigns with a credit rating of AA- and above issued by S&P Global Ratings \/ Fitch Ratings or Aa3 and above issued by Moody\u2019s Investors Service. If different ratings are accorded by two or more credit rating agencies, then the lowest rating shall be reckoned.<\/p>\n\n\n\n


        4. AD Cat-I banks may receive and pay interest on margin posted and collected on their own account or on behalf of their customers for a permitted derivative contract entered into with a person resident outside India.<\/p>\n\n\n\n

        1. 5. AD Cat-I banks shall maintain a separate account in the name of persons resident outside India for the purpose of posting and collecting cash margin in India, and transactions incidental thereto.<\/li><\/ol>\n\n\n\n
          1. 6. The directions contained in this circular have been issued under Sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions \/ approvals, if any, required under any other law.<\/li><\/ol>\n\n\n\n

            Yours faithfully,<\/p>\n\n\n\n

            (Dimple Bhandia)
            Chief General Manager<\/p>\n\n\n\n

            For full detail Click below….<\/strong><\/p>\n\n\n\n

            http:\/\/bit.ly\/RBI-Circular-10<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

            February 15, 2021 All Authorised Dealer Category-I Banks Madam\/Sir, Margin for Derivative Contracts Attention of Authorised Dealer Category-I (AD Cat-I) banks is invited to the Foreign Exchange Management (Margin for Derivative Contracts) Regulations, 2020 notified in the Gazette of India vide notification no. FEMA.399\/RB-2020 dated October 23, 2020 (Annex I). Accordingly, directions are being issued […]<\/p>\n","protected":false},"author":1,"featured_media":46,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[10,38],"tags":[34],"class_list":["post-502","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-circulars","category-rbi-circulars","tag-rbi"],"_links":{"self":[{"href":"https:\/\/rvks.in\/blogs\/wp-json\/wp\/v2\/posts\/502","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/rvks.in\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/rvks.in\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/rvks.in\/blogs\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/rvks.in\/blogs\/wp-json\/wp\/v2\/comments?post=502"}],"version-history":[{"count":4,"href":"https:\/\/rvks.in\/blogs\/wp-json\/wp\/v2\/posts\/502\/revisions"}],"predecessor-version":[{"id":523,"href":"https:\/\/rvks.in\/blogs\/wp-json\/wp\/v2\/posts\/502\/revisions\/523"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/rvks.in\/blogs\/wp-json\/wp\/v2\/media\/46"}],"wp:attachment":[{"href":"https:\/\/rvks.in\/blogs\/wp-json\/wp\/v2\/media?parent=502"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/rvks.in\/blogs\/wp-json\/wp\/v2\/categories?post=502"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/rvks.in\/blogs\/wp-json\/wp\/v2\/tags?post=502"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}