RBI seeks comments from stakeholders on draft circular on disclosure of forex transactions
The RBI has invited comments on the draft circular from banks, market participants and other interested parties by January 9, 2026.
“To enhance transparency in the foreign exchange market, we have mandated Authorized Dealers in January 2024 to provide the mid-market price/bid and ask price of foreign exchange derivative contract/foreign exchange interest rate derivative contract before entering into a contract with a retail user and include the same in the deal confirmation/term document,” the RBI said in a statement. he said.
As a further step towards promoting greater transparency in the foreign exchange market, it was proposed to impose an obligation on Authorized Dealers to provide details of the transaction cost (remittance fees, foreign exchange rate, foreign exchange conversion fees, etc.) associated with foreign exchange cash, foreign exchange tom and foreign currency spot contracts offered to retail users.
The review determined that Authorized Dealers must provide the user with details of the total transaction cost (showing all relevant costs and charges) when offering foreign exchange cash, foreign exchange tomorrow (where a foreign exchange trade is settled the next business day) and foreign currency spot contracts to the retail user.
The relevant costs and expenses will include termination and acquisition charges, including any intermediary’s fees, exchange rate and currency conversion charges before entering into the contract and will also include the same at deal confirmation. PTI
