The Reserve Bank of India issued updated directions under the Master Direction on Risk Management and Inter-Bank Dealings (2016), considering evolving foreign exchange market conditions and risk management requirements.

1. Prohibition on Non-Deliverable INR Derivatives:
   • Authorised Dealers (ADs) are prohibited from offering non-deliverable derivative contracts involving INR to both residents and non-residents.
   • Deliverable forex derivative contracts may continue only for genuine hedging purposes.
   • Users must not hold offsetting non-deliverable derivative positions.
   • ADs may seek declarations, documents, or confirmations to ensure compliance.
2. Restriction on Rebooking of Forex Contracts:
   • ADs shall not permit rebooking of any forex derivative contract involving INR (deliverable or non-deliverable) once cancelled after issuance of this circular.
   • ADs may obtain necessary documentation to verify compliance.
3. Restriction on Related Party Transactions:
   • ADs are prohibited from entering into INR derivative contracts with related parties.
   • “Related party” definition aligned with:
     • Ind AS 24 – Related Party Disclosures
     • IAS 24 – Related Party Disclosures

                              Or equivalent accounting standards