Notification/Circular No.: RBI/2026-27/14; A.P. (DIR Series) Circular No. 07 dated April 20, 2026
Applicable Act/Rule: Foreign Exchange Management Act, 1999
Applicable Section/Rule: Section 10(4); Section 11(1); Section 11(2)
Effective Date: April 20, 2026
Reserve Bank of India issued this circular to Authorised Dealers in reference to earlier circulars and the Master Direction on Risk Management and Inter-Bank Dealings dated July 05, 2016.
The circular withdraws the instructions issued under A.P. (DIR Series) Circular No. 03 dated April 01, 2026. It specifies that Authorised Dealers shall not undertake any foreign exchange derivative contract involving INR with related parties, except for cancellation and rollover of existing contracts and transactions undertaken with non-related non-resident users on a back-to-back basis. It defines related parties as per applicable accounting standards and applies to Authorised Dealers.
The term “related parties” will be interpreted as per Indian Accounting Standard (Ind AS) 24 or International Accounting Standard (IAS) 24, ensuring consistency with globally accepted accounting definitions.
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