The Reserve Bank of India is preparing a report on derivatives trading with an objective to bring harmony in regulatory aspects for over-the-counter and exchange traded products.
"We are in advanced stages of preparing a report, which looks at harmonisation of regulations for OTC and exchange traded products in the derivatives segment," G Padmanabhan, regional director, Andhra Pradesh, RBI, said at a seminar organised by Indian Banks' Association and Fixed Income Money Market and Derivatives Association of India, in Mumbai on Tuesday.
The draft report would be ready in a couple of weeks, Padmanabhan, who was earlier chief general manager, internal debt management, said, adding the recommendations of the committee would then have to be approved by RBI.
Referring to allowing banks with strong risk management system to trade and act as a `market maker' for interest rate derivatives, he said the central bank was also in the process of laying out certain parameters for banks to fulfill before being permitted for such transactions.
RBI executive director Usha Thorat on Monday said exchange traded interest rate derivatives, introduced in early part of this year, have not seen much of activity and the apex bank was reviewing the matter within and with the Securities and Exchange Board of India.
IBA chief executive H N Sinor said the volume in interest rate derivatives was around Rs 200 crore (Rs 2 billion), and had the potential to grow 10 times.
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