What changed
RBI moved from draft directions issued on February 6, 2026, to a final Master Direction after reviewing market feedback. The final version incorporates modifications based on stakeholder comments.
What it means for you
Banks can now offer credit index derivatives and total return swaps on corporate bonds, expanding risk management tools. This deepens the corporate bond market and aligns with budget goals for financial innovation.
What you must do
- Review the final Master Direction for operational requirements.
- Assess readiness to offer credit index derivatives and total return swaps.
- Update internal risk management policies to accommodate new products.
- Train staff on compliance and reporting under the new framework.
Who it affects
Banks dealing in credit derivatives, Corporate bond market participants, Risk management teams, Compliance departments
What products are enabled by this Master Direction?
Derivatives on credit indices and total return swaps on corporate bonds are now permitted.
When was the draft direction issued?
The draft was issued on February 6, 2026, as part of the Statement on Developmental and Regulatory Policies.
Does this direction replace any existing rules?
The source does not specify replacement; it is a new Master Direction for credit derivatives.