We at Finakon track the regulatory changes. We also use AI to create a summary. We are providing a quick overview of the RBI circulars on a weekly basis on our website. The summary is neither exhaustive nor comprehensive. For accurate information, users shall refer to the original circular of the regulator. Finakon shall not be responsible for inferences drawn based on the summary provided.

RBI Raises Minimum Daily CRR Maintenance Requirement to 99%

The Reserve Bank of India (RBI) has increased the minimum daily Cash Reserve Ratio (CRR) maintenance requirement for scheduled banks from 90% to 99% of the prescribed CRR.

The revised requirement will take effect from the reporting fortnight beginning October 16, 2026. Banks must maintain at least 99% of the required CRR on each day, while ensuring that the average daily CRR maintained during the reporting fortnight is not below the prescribed CRR.

https://rbi.org.in/scripts/BS_CircularIndexDisplay.aspx?Id=13736

RBI Tightens Rules for INR-Linked Forex Derivatives

The Reserve Bank of India (RBI) has revised its Master Direction on Risk Management and Inter-Bank Dealings, introducing the following changes:

• Cancellation and rebooking: Rebooking cancelled INR-linked forex derivative contracts is prohibited. Rollovers at maturity remain permitted, subject to existing requirements.
• Position limits: The threshold for taking positions without establishing underlying exposure has been reduced from USD 100 million to USD 5 million under both specified facilities.
• Documentation: Authorised Dealers must obtain an undertaking regarding hedging of the same underlying exposure and retain supporting documents for at least two years.

The directions are effective immediately.

https://rbi.org.in/scripts/BS_CircularIndexDisplay.aspx?Id=13737

RBI Introduces Foreign Exchange Risk Reserve for INR-Linked Derivatives

The Reserve Bank of India (RBI) has introduced a Foreign Exchange Risk Reserve (FERR) requirement for eligible INR-linked forex derivative contracts.

• Applicability: Contracts exceeding USD 2 million for hedging current account transactions involving foreign currency purchases against INR.
• Reserve: 20% of the INR equivalent of each eligible contract’s notional amount, maintained in cash with RBI until contract termination.
• Reporting: Authorised Dealers must report FERR daily through CIMS.
• Compliance: Splitting transactions to avoid the threshold is prohibited.

The directions apply to contracts entered into after their issuance.

https://rbi.org.in/scripts/BS_CircularIndexDisplay.aspx?Id=13738

RBI Restricts INR-Linked NDDCs to Hedging and Introduces FERR

The Reserve Bank of India (RBI) has revised its Master Direction on Risk Management and Inter-Bank Dealings, restricting INR-linked Non-Deliverable Derivative Contracts (NDDCs) offered to non-residents to hedging purposes only.

The revised directions also require Authorised Dealers to maintain a Foreign Exchange Risk Reserve (FERR) for INR-linked forex derivative contracts used to hedge their own assets and liabilities.

The reserve must equal 20% of the INR equivalent of each contract’s notional amount where the Authorised Dealer purchases foreign currency against INR. It must be maintained in cash with the RBI daily until the contract terminates.

The directions apply to contracts entered into after their issuance.

https://rbi.org.in/scripts/BS_CircularIndexDisplay.aspx?Id=13739