MANU/RMIC/0230/2016

Ministry : Reserve Bank of India

Department/Board : RBI

Circular No. : FMRD.DIRD.12/14.01.011/2016-2017
                   RBI/2016-2017/199

Date : 29.12.2016

Notification/ Circulars Referred : Circular DBOD No.BP.BC.86/21.04.157/2006-07 dated April 20, 2007 MANU/DBOD/0053/2007

Citing Reference:
Circular DBOD No.BP.BC.86/21.04.157/2006-07 dated April 20, 2007 MANU/DBOD/0053/2007  Referred

To

All eligible market participants

Dear Sir/Madam

Introduction of Interest Rate Options in India

As announced in the fourth bi-monthly Monetary Policy Statement 2016-17, it has been decided to introduce Interest Rate Options in India.

2. The Reserve Bank of India has accordingly issued a Notification No. FMRD.DIRD. 11/2016 dated December 28, 2016 giving details of the directions for the introduction of Interest Rate Option. Eligible market participants are permitted to take positions in Interest Rate Options for their own balance sheet management and for market making purposes. Participants, who are eligible as market makers are, however, advised to ensure that appropriate infrastructure and risk management systems are in place.

3. These directions have been issued under Section 45 W of Chapter III D of the Reserve Bank of India Act, 1934.

4. A copy of the Interest Rate Options (Reserve Bank) Directions, 2016 which is placed on the RBI Website, is enclosed.

5. The directions shall be effective from January 31, 2017.

Yours........