Mumbai: The Reserve Bank of India (RBI) on Tuesday modified its guidelines for banks for offering derivative products.
Foreign banks operating in India can be market makers for specific products only if they have the ability to price the products locally in India, the central bank said in a statement.
It also said no bank can be a market maker in a product it cannot price independently.
Before offering derivative products to clients, banks should obtain resolution of the board of the corporate authorizing the concerned official of the company to undertake derivative transactions on behalf of the company, the RBI said.
