The Hindu Business Line : ‘RBI wants transparency, clarity in futures ’

Kochi, Sept. 17 The priority of the RBI is total transparency and clarity of operations in the currency futures market, Mr E. Madhavan, General Manager of the Reserve Bank of India, said at Kochi.

Inaugurating a seminar on Currency Futures, organised by the Federal Bank, he said that the apex bank had held extensive consultations with all segments and market players before the guidelines were drawn up and finalised. He clarified that currency futures are similar to forward contracts and both are tools for hedging the currency rate fluctuations and market risks.

In view of the new and sophisticated products that are hitting the Indian financial markets, Mr K.S. Harshan, Executive Director of Federal Bank, stressed the need for greater financial literacy among all the market participants. Though a relatively complex product, the newly introduced currency futures is expected to find acceptance in the Indian market. The depth of the market is also expected to improve as a consequence, he said.

Ms Huzan Mistry and Mr Balu Nair, experts on currency futures from the NSE, explained in detail the various processes, workflow and execution of currency futures trades executed through the NSE. The various regulations that have been erected for such transactions and their intricacies and how they differ from OTC-Forwards were also explained.

Participants from the diverse sectors of the export/import trade, financial market operators, mutual funds and equity firms sought clarifications and cleared their doubts through an active interactive session, a press release issued here said.

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