No longer current — withdrawn, no replacement on file yet
Source: Reserve Bank of India · RBI/2008-09/178 · issued 17 Sep 2008 · ~1 min read
Quick answerRBI now permits Urban Co-operative Banks (UCBs) authorized as AD Category I or II to participate in SEBI-recognized currency futures exchanges as clients, solely for hedging underlying forex exposures, per FEMA notification.
What changed
RBI accepted an Internal Working Group's recommendations to introduce exchange-traded currency futures in India. UCBs with forex authorization (AD Category I or II) can now trade on designated currency futures exchanges as clients, but only to hedge their own forex exposures.
What it means for you
UCBs can now use a regulated exchange-traded instrument to manage currency risk, reducing reliance on over-the-counter hedging. This aligns with global practices and provides a transparent, standardized hedging avenue. Banks must ensure compliance with RBI's Foreign Exchange Department guidelines and SEBI exchange rules.
Historical instruction — do not use for current compliance. This is what was required at the time; it no longer reflects current RBI requirements. If no replacement rule is linked above, that only means none is recorded on our register yet — it does not prove no later applicable rule exists. Confirm on the official RBI source below.
What banks were required to do at the time
Verify your UCB holds valid Authorised Dealer Category I or II license from RBI.
Register as a client on SEBI-recognized currency futures exchanges.
Ensure all futures positions are solely for hedging underlying forex exposures, not speculation.
Adhere to RBI (Foreign Exchange Department) guidelines and FEMA notification No. FEMA177/RB-2008.
Maintain documentation linking futures trades to underlying forex exposures for audit.
Who it affects
Primary (Urban) Co-operative Banks with AD Category I or II status, RBI's Foreign Exchange Department, SEBI-recognized currency futures exchanges
❓ Common questions
Regulatory timeline
Decoded by BankPulse2026-06-19 12:32 IST
repealed_by — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
Status change: withdrawn05 Aug 2026, 04:00 IST
Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).
Can UCBs use currency futures for speculation?
No. The circular explicitly permits participation only for hedging underlying forex exposures. Speculative positions are not allowed.
Which UCBs are eligible to participate?
Only UCBs authorized as Authorised Dealer Category I or II by RBI can participate in designated currency futures exchanges.
What regulatory framework governs this?
The activity is governed by RBI's Foreign Exchange Department guidelines and FEMA notification No. FEMA177/RB-2008 dated August 1, 2008.
📜 This document’s life story (1 recorded event, each backed by RBI’s own words)
Repealed byRBI/2025-26/100 — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
RBI’s words: “Official withdrawal register entry #2115: UBD.PCB.Cir.No.14/16.12.000/08-09 — "Introduction of Currency Futures - UCBs" dated September 17, 2008”
📜 Read the original circular — full text as issued by RBI
RBI/2008-09/178
UBD.PCB.Cir.No. 14/16.12.000/ 08-09
September 17, 2008.
The Chief Executive Officer of
All Primary (Urban) Co-operative Banks.
Dear Sir/Madam,
Introduction of Currency Futures - UCBs
As announced in the Annual Policy Statement for the year 2007-08 , an Internal Working Group was set up by the Reserve Bank of India to study the international experience and suggest a suitable framework to operationalise the proposal to introduce exchange traded Currency Futures in India. The Working Group has in its report, recommended the introduction of currency futures in the domestic foreign exchange market.
2. The recommendations have been examined and accepted by the Reserve Bank of India and directions have been issued, vide Notification No. FEMA177/RB-2008 dated August 1, 2008 . Accordingly, it has been decided that UCBs which are authorized to undertake forex business as Authorised Dealer Category I and II, may participate in the designated currency futures exchanges recognized by SEBI as clients, subject to RBI (Foreign Exchange Department) guidelines in the matter, only for the purpose of hedging their underlying forex exposures.
Yours faithfully,
( A.K Khound )
Chief General Manager-in-Charge
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2008-09/178 · issued 17 Sep 2008. The plain-English explanation above is BankPulse’s own independent summary.
Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.
BankPulse Compliance Evidence Pack — generated 05 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=4474&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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