RBI bans rupee non deliverable derivatives for residents and non residents shaking forex hedges

Banks have been told to stop a major rupee hedging tool

The Reserve Bank of India has directed authorised dealers to stop offering rupee non-deliverable derivative contracts to both resident and non-resident entities, including local companies. The move targets a specific forex hedging instrument and applies broadly across counterparties. Market players will now have to unwind or rework exposure strategies under the RBI’s instructions.