Axis Bank executes first onshore INR non deliverable derivative trade in India

Axis Bank, an Indian private sector bank, has successfully executed its first onshore INR Non Deliverable Derivative trade with a large domestic corporate client based in the southern region.

This milestone makes Axis Bank one of the pioneering Indian banks to carry out such a transaction following the recent guidelines issued by the Reserve Bank of India (RBI).

The RBI, on 6 June 2023, released new guidelines allowing banks to offer onshore Non Deliverable Derivative Contracts involving the Indian Rupee (INR) to resident clients. These contracts are settled in cash and denominated in INR. With the introduction of these guidelines, Axis Bank seized the opportunity to engage in an onshore INR Non Deliverable Derivative trade, paving the way for further innovation in the Indian financial market.

By enabling onshore Non Deliverable Derivative Contracts, the RBI aims to enhance the hedging options available to resident clients while maintaining the stability and integrity of the financial system. Axis Bank’s successful execution of this trade demonstrates its commitment to staying at the forefront of financial services and offering cutting-edge solutions to its corporate clients.

Axis Bank executes first onshore INR non deliverable derivative trade in India. Photo courtesy of Christopher J. Fynn/Wikimedia Commons.

Axis Bank’s expertise in derivative products and its adherence to regulatory guidelines have positioned it as a trusted partner for clients seeking to navigate the intricacies of the financial markets. This recent development further solidifies Axis Bank’s position as a leading player in the Indian banking sector, capable of delivering innovative solutions to meet the evolving needs of its clientele.

As the Indian financial landscape continues to evolve, Axis Bank remains dedicated to driving growth and contributing to the development of the country’s economy. The execution of the onshore INR Non Deliverable Derivative trade marks a significant step in Axis Bank’s journey towards providing comprehensive and sophisticated financial services to its valued customers.

Neeraj Gambhir — Axis Bank Group Executive and Head of Treasury, Markets & Wholesale Banking Products said: “Axis Bank has taken this opportunity to further strengthen its commitment to innovation and pioneering customer-centric solutions by ensuring that we are able to offer INR NDDCs to our domestic clients.

“These guidelines have further liberalised the domestic foreign exchange market and are an important step taken by the regulator to bring the hedging activity onshore. The eligible resident entities have been allowed to use Non Deliverable contracts and this should allow them more flexibility in managing their currency risk.”