Governor Das for greater participation of banks in rupee derivatives in India, abroad

Reserve Bank Governor emphasizes Indian banks' participation in rupee derivatives market, highlighting need for prudent expansion globally.

Reserve Bank Governor Shaktikanta Das on April 8 stressed the need for greater participation of Indian banks in rupee derivatives market, both domestically and offshore, while being prudent.

The Governor noted that participation of domestic banks in derivative markets remains limited with only a small set of active market-makers. Also, participation of Indian banks in global markets is growing but it is quite small.

"Domestic banks are dealing with market-makers in global markets rather than with end clients and are yet to emerge as market-makers of note globally," Das said in his keynote address at the FIMMDA-PDAI Annual Conference in Barcelona.

Of course, he added banks need to do their own due diligence, assess their risk appetite, and then move forward carefully in this direction.

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"Going forward, our focus should be on enhancing and widening the participation of Indian players in markets for INRderivatives, both domestically and offshore, while being prudent," the Governor said.

He noted that the recent financial market reforms undertaken by the Reserve Bank are aimed at providing a strong bedrock for markets to move to the next trajectory for meeting the growing funding requirements in the economy, providing cost-effective hedging options and competing effectively in global markets.