India widens banks' disclosure of offshore Indian rupee trades

India’s central bank on Monday mandated that banks report ‌offshore rupee derivative trades undertaken by their group entities, to bring transparency to a market that has amplified pressure on the Asian currency.

Here are the details:

Banks must report all over-the-counter FX derivative contracts involving the rupee executed globally by their related parties to the trade repository of the Clearing Corporation of India.

Banks must report both deliverable and non-deliverable contracts; trades below $1 million will be exempted.

The move significantly widens the scope of existing reporting norms, which primarily captured transactions undertaken by banks and onshore entities.

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Currently, Indian banks report ⁠all derivative transactions, including by their overseas offices, to the regulator; but foreign lenders only report such trades by their India units and ​not those executed by offshore units.

The changes will be implemented in phases, with lenders required to report transactions by their affiliates covering at least 70% of the notional value of FX derivative contracts by July 2027, rising to 80% by January 2028 and 100% by July 2028.

Banks’ parent entities will need to report all offshore rupee trades from July 2027.

Earlier this month, Reuters reported that India planned to move ahead with wider reporting requirements despite objections from lenders; these changes were first proposed in February.