Hedging hit hard

India’s regulators have tended to err on the side of caution when dealing with the country’s derivatives sector. And many market participants believe this conservative approach resulted in the ­Reserve Bank of India (RBI) drafting stringent new proposals last year that could ban zero- or reduced-cost structures, outlaw the use of complex onshore foreign exchange derivatives and incorporate far stricter reporting requirements on banks’ derivatives dealings with companies (see box).

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