RBI permits banks to become trading /clearing members of SEBI-approved exchanges for Currency Futures
In view of Currency Futures (Reserve Bank) Directions, 2008, which has come into force with effect from August 6, 2008, Reserve Bank of India has decided to permit scheduled commercial banks (AD Category I) to become trading / clearing members of the currency derivatives segment to be set up by the Stock Exchanges recognized by SEBI, subject to their fulfilling the following prudential requirements.
(i) Minimum networth of Rs. 500 crores,
(ii) Minimum CRAR of 10%
(iii) Net NPA not exceeding 3%
(iv) Net Profit for last 3 years
Banks which fulfil the conditions mentioned above should lay down detailed guidelines with Board's approval for conduct of this activity and management of risks. It should be ensured that the bank’s position is kept distinct from the clients' position. In case of supervisory discomfort with the functioning of a bank, the Reserve Bank may impose restrictions on the bank regarding the conduct of this business as it deems fit.
The banks which do not meet the above minimum prudential requirements are permitted to participate in the currency futures market only as clients.
Guidelines for currency futures trading- Currency Futures (Reserve Bank) Directions, 2008
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