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RBI Updates Hedging Rules: Permits Non-Deliverable Derivatives and Rebooking of Cancelled Contracts

The Reserve Bank of India has issued a new circular (RBI/2026-27/14, dated April 20, 2026), superseding its earlier directive of April 1, 2026. The previous communication stands withdrawn with immediate effect.

Under the revised guidelines, customers are now permitted to:

  1. Enter into non-deliverable derivative contracts involving the Indian Rupee (INR), and

  2. Rebook any cancelled deliverable or non-deliverable derivative contracts involving INR, subject to prevailing regulatory hedging requirements.

Importantly, all prior regulatory frameworks issued before April 1, 2026—including the Master Direction on Risk Management and Inter-Bank Dealings dated July 5, 2016, as amended—continue to remain in full force. Stakeholders are advised to refer to the updated circular for compliance

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