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Home / Business / Reserve Bank of India announces revised credit default swaps guidelines

Reserve Bank of India announces revised credit default swaps guidelines

The directions issued on Thursday will be effective from May 9
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Our Special Correspondent   |   Mumbai   |   Published 11.02.22, 03:22 AM

The Reserve Bank of India (RBI) on Thursday announced revised guidelines for credit default swaps (CDS).

CDS is a contract in which a counterparty (seller) commits to compensate the other counterparty (buyer) for the loss in the value of an underlying debt instrument.

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The directions issued on Thursday will apply to credit derivatives transactions undertaken in Over-the-Counter (OTC) markets and on recognised stock exchanges in India, and will be effective from May 9.

Residents and non-residents who are eligible to invest in corporate bonds and debentures under the Foreign Exchange Management (Debt Instruments) Regulations 2019 will be eligible to participate in the credit derivatives market.

The RBI also proposed to extend the term-liquidity facility of Rs 50,000 crore offered to emergency health services by three months till June 30, 2022. 

Digital vouchers

The Reserve Bank of India  on Thursday increased the cap on the e-RUPI prepaid digital vouchers to Rs 1 lakh from Rs 10,000 and permitted its usage multiple times to facilitate digital delivery of various government schemes to the beneficiaries. 

The e-RUPI prepaid digital voucher, developed by the National Payments Corporation of India (NPCI), was launched in August 2021 as a person-specific and purpose-specific cashless voucher with a cap of Rs 10,000 and single time redemption facility.



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