RISK MANAGEMENT AND INTER-BANK DEALINGS - FOREIGN EXCHANGE RISK RESERVE

NEW DELHI, Oct. 10 -- The Government of India issued the following FEMA circular:

RBI/2026-27/292

A.P. (DIR Series) Circular No. 26

October 10, 2026

To,

All Authorised Dealers

Madam/Sir,

Risk Management and Inter-Bank Dealings - Foreign Exchange Risk Reserve

Attention of Authorised Dealers is invited to the Master Direction - Risk Management and Inter-Bank Dealings dated July 05, 2016, as amended from time to time.

2. With a view to ensuring the orderly functioning of the foreign exchange market, it has been decided that:

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Authorised Dealers shall be required to maintain a Foreign Exchange Risk Reserve (FERR) for foreign exchange derivative contracts involving INR undertaken with users;

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The Reserve shall be applicable to a...