RBI releases Draft Master Direction – Rupee Interest Rate Derivatives Directions 2025
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The Reserve Bank of India (RBI) has released a new set of draft guidelines titled “Draft Master Direction – Reserve Bank of India (Rupee Interest Rate Derivatives) Directions, 2025”. These draft rules have been published on the RBI’s official website for public consultation.
The RBI is now inviting feedback, suggestions, and comments on the draft from:
- Banks
- Market participants
- Financial institutions
- Other interested stakeholders
The last date to submit feedback is July 7, 2025.
How to Send Your Feedback
You can send your suggestions either by post or email.
Postal Address: Chief General Manager
Reserve Bank of India
Financial Markets Regulation Department
9th Floor, Central Office Building
Shahid Bhagat Singh Marg, Fort
Mumbai – 400 001
By Email:
Email subject should be:
“Feedback on Draft Reserve Bank of India (Rupee Interest Rate Derivatives) Directions, 2025”
Why Has RBI Issued These Draft Directions?
The RBI had previously issued guidelines on Rupee Interest Rate Derivatives (IRD) in June 2019. Since then, the market has seen many changes, including:
- Introduction of new financial products in the derivatives market
- Increasing participation by non-resident investors
- Growing need to simplify and ease compliance requirements for market participants
Due to these developments, the RBI decided to comprehensively review and update the existing rules. The newly drafted directions aim to:
- Keep pace with current market trends and changes
- Make the rules more practical and relevant for today’s environment
- Reduce the compliance burden on institutions by simplifying reporting requirements
In addition, the draft proposes a new rule:
Firms will be required to report their global Rupee IRD transactions (i.e., deals made outside India as well), to help improve transparency in the market.
What Are Rupee Interest Rate Derivatives?
Rupee Interest Rate Derivatives are financial contracts that allow participants to manage or hedge interest rate risk in Indian rupees. These products are mainly used by:
- Banks
- Corporates
- Investors
- Financial institutions
For example, if a company is worried about interest rates rising in the future, it can use IRDs to lock in current rates and avoid losses later.
In Summary
- RBI has released draft guidelines for Rupee Interest Rate Derivatives for 2025.
- Feedback from banks, investors, and the public is invited until July 7, 2025.
- The new rules aim to modernize the regulatory framework, reduce compliance, and increase transparency in the IRD market.
- Suggestions can be sent by post or email to RBI’s Financial Markets Regulation Department.
This is a chance for all stakeholders in the financial sector to share their opinions and shape future regulations in India’s interest rate derivatives market.
