- within Law Department Performance topic(s)
RBI, vide their circular dated April 30, 2024, has issued the Foreign Exchange Management (“FEM”) (Margin for Derivatives Contracts) (First Amendment) Regulations, 2024, amending the FEM (Margin for Derivatives Contracts) Regulations of 2020. Pursuant to the amendment, ADs may:
- post and collect margin, in India and outside India, for a permitted derivative contract entered into with a person resident outside India, and receive and pay interest on such margin;
- post and collect margin, outside India, for a permitted derivative contract entered into with another AD, provided that at least one of the ADs is a branch of a foreign bank, and receive and pay interest on such margin; and
- post and collect margin, in India and outside India, for derivative transactions of their overseas branches and International Financial Services Centre Banking Units and receive and pay interest on such margin.
Further, RBI, vide their notification dated May 6, 2024, have issued the FEM (Deposit) (Fourth Amendment) Regulations, 2024, amending the regulation on other deposits made or held by ADs, under the FEM (Deposit) Regulations, 2016. ADs in India may allow a person resident outside India to open, hold and maintain an interestbearing account in Indian Rupees and/ or foreign currency for the purpose of posting and collecting margin in India, for a permitted derivative contract entered into by such person in terms of FEM (Margin for Derivative Contracts) Regulations, 2020.
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