Reining in India
The Reserve Bank of India released its long-awaited draft derivatives regulations in early December. But far from opening the market up to a wider universe of products, dealers complain the derivatives market has been reined back in. Duncan Wood reports
Bankers in Mumbai have been left shocked and bewildered by the release on December 12 of an unexpectedly austere set of draft derivatives rules by the Reserve Bank of India (RBI). The rules had been flagged in advance by the RBI as a set of "broad generic principles for undertaking derivative transactions". Instead, the regulator delivered a document that threatens to strangle some existing products - like swaptions and short-dated currency derivatives - while also closing the door on a range of
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