Indian companies will have to provide documents to show they have an underlying exposure in order to carry out foreign currency derivatives transactions, according to new rules drawn up by the Reserve Bank of India (RBI). Banks have been given the power to cancel contracts that fail to comply.
The new rules - the Comprehensive Guidelines on Over the Counter Foreign Exchange Derivatives and Overseas Hedging of Commodity Price and Freight Risks - came into force on February 1. Under the new regime
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