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RBI CIRCULAR
12, 2016 c.f. G.S.R. No. 19 (E) dated January 12, 2016 3. The matter relating to penalties is being reviewed.
and have come into force with effect from January 12, Pending issue of the same, levy of penalties as under
2016. The Master Direction No. 16 of 2015-16 (Export the scheme of Incentives & Penalties issued vide our
of Goods and Services) has been updated accordingly Master Circular No. G-5/03.39.01/2014-15 dated July 01,
to incorporate the above changes. 2014, shall remain in force.
3. ADs may bring the contents of the circular to the notice Yours faithfully,
of their constituents concerned.3 (P. Vijaya Kumar)
Chief General Manager
4. The directions contained in this circular have been
issued under Section 10(4) and 11(1) of the Foreign Transactions in derivatives by regulated
Exchange Management Act, 1999 (42 of 1999) and are institutional entities on electronic
without prejudice to permissions/ approvals, if any, platforms
required under any other law.
RBI/2015-16/392
Yours faithfully,
(Shekhar Bhatnagar) FMRD.DIRD.No.9/14.03.01/2015-16
Chief General Manager-in- charge
All Market Participants
Currency Distribution & Exchange
Scheme (CDES) for bank branches based Dear Madam/Sir,
on performance in rendering customer 1. A reference is invited to para 37 of the First Bi-monthly
service to the members of public Monetary Policy Statement announced on April 5, 2016,
in terms of which, it was proposed to review the existing
RBI/2015-16/393 guidelines on OTC derivatives in order to make
participation in OTC derivative markets through
DCM (CC) No.G-10/3352/03.41.01/2015-16 electronic platforms more broad-based. Accordingly, it
has been decided to enable any institutional entity
The Chairman & Managing Director / Chief Executive regulated by the Reserve Bank of India (RBI), the
Officer, All Banks Securities and Exchange Board of India (SEBI), the
Insurance Regulatory and Development Authority of
Madam / Dear Sir, India (IRDAI), the Pension Fund Regulatory and
1. Please refer to our Circular DCM (CC) No.4846/03.41.01/ Development Authority (PFRDA) and the National
Housing Bank (NHB) to trade in interest rate swaps (IRS)
2014-15 dated May 21, 2015 on "The Scheme of on electronic trading platforms.
Incentives & Penalties - Review".
2. At present regulated entities, other than scheduled
2. As advised therein, the scheme of Incentives & Penalties banks, are unable to conduct transactions on electronic
has since been reviewed. On review, it has been platforms for interest rate swaps (IRS) as one party to
decided to segregate the scheme of incentives from such transactions has to be either the Reserve Bank of
penalties as also to revise certain incentives. India (RBI) or a scheduled bank or such other agency
Accordingly, the new scheme titled "Currency falling under the regulatory purview of the RBI which
Distribution & Exchange Scheme (CDES)" containing may be specified by the RBI in this regard. In this
revised incentives is framed and the same is being context, the Reserve Bank of India, in exercise of its
annexed for information and necessary action. In terms powers conferred by Section 45V of the Reserve Bank
of the above scheme, the performance based incentives of India Act, 1934 and of all the powers enabling it in
will continue to be paid as hitherto w.e.f July 01, 2015; this behalf, hereby specifies the Clearing Corporation
however, the incentives for installation of machines of India Ltd (CCIL) as an approved counterparty for IRS
have been restricted to Cash Recyclers & ATMs
dispensing lower denomination notes, subject to
certain caps on reimbursement of cost per machine and
will be effective from the date of the circular.
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