The phased timeline follows feedback from market participants that sought more time to meet reporting thresholds.
Banks will now be required to ensure that reported transactions account for at least 70 per cent, 80 per cent and 90 per cent of the notional value of such contracts over a staggered period.
The directions require AD Cat-I banks to report OTC foreign exchange derivative contracts involving the rupee, including those undertaken globally by their offshore related parties, to the trade repository of the Clearing Corporation of India Ltd (CCIL).
The feedback highlighted operational challenges in capturing and reporting transactions undertaken by related entities across jurisdictions. The RBI did not accept this, saying the requirement is aimed at improving transparency and enabling price discovery in the foreign exchange market, and noted that some standalone primary dealers already comply with similar norms. The framework includes staggered implementation and exemption for trades below a specified threshold.
On concerns that Indian branches of foreign banks may not have access to data of offshore affiliates, the RBI said offshore related parties can report such transactions independently to CCIL.
The norm defines ‘related party’ in line with equivalent accounting standards, excluding associates. The feedback had proposed limiting the scope to AD Cat-I banks and their offshore branches, which the RBI did not accept, saying the exclusion of associates already narrows the definition.
The RBI accepted feedback seeking clarity on the scope of transactions. It stated that both deliverable and non-deliverable OTC foreign exchange derivative contracts involving the rupee will be covered under the framework.