Reserve Bank of India likely to yield ground on derivatives rules

Industry-wide opposition seems likely to force climbdown

An industry-wide outcry sparked by the Reserve Bank of India's (RBI) draft derivatives rules seems to have persuaded the regulator to drop its most controversial plans. But the RBI looks likely to ignore certain other complaints, notably those concerning the restructuring of derivatives deals and the policing of customer activity.

The draft rules, published on December 12, would have completely shut down the active onshore markets for swaptions and short-term currency hedging. They would also