What changed
RBI now requires that if banks and financial institutions enter into OTC interest rate derivatives through brokers, those brokers must be FIMMDA-accredited. This supplements the 2007 comprehensive derivatives guidelines.
What it means for you
Banks and lenders must update their approved broker panels to include only FIMMDA-accredited entities for OTC IRD deals. The source does not specify consequences of non-compliance.
What you must do
- Verify that all brokers used for OTC rupee interest rate derivatives are currently accredited by FIMMDA.
- Update internal policies and approved broker lists to reflect the FIMMDA accreditation requirement.
- Train treasury and derivatives desk staff on the new accreditation mandate.
Who it affects
All scheduled commercial banks (excluding RRBs and LABs), All India term-lending and refinancing institutions, Primary dealers, Financial institutions dealing in OTC rupee interest rate derivatives
Does this circular apply to exchange-traded interest rate derivatives?
The source does not address exchange-traded instruments; it specifically covers OTC rupee interest rate derivatives.
What happens if we use a broker not accredited by FIMMDA?
The source advises that brokers must be FIMMDA-accredited but does not specify consequences.
Is this circular still in effect?
The source notes that these directions have been superseded by Master Direction – Reserve Bank of India (Rupee Interest Rate Derivatives) Directions, 2025.