The Reserve Bank of India has issued new Master Directions regarding credit derivatives, which will govern the functioning of credit derivatives markets in India.
Master Direction – Reserve Bank of India (Credit Derivatives) Directions, 2026
On June 25, 2026, the Reserve Bank of India (RBI) released Master Direction FMRD.DIRD.No.02/14.03.046/2026-27 regarding Credit Derivatives. This release follows the announcement made on February 6, 2026, regarding the incorporation of derivatives on credit indices and total return swaps into the regulatory framework.
The Master Direction delineates the regulatory provisions and operational guidelines for all participants in the credit derivatives market. It aims to pave the way for structured growth and risk management practices in this evolving sector. The RBI’s initiative highlights its commitment to enhancing the credit risk management framework in Indian financial markets.
Legal practitioners advising clients in financial sectors must familiarize themselves with the new directives to ensure compliance and to explore potential business opportunities arising from these regulatory advancements.
Citations
- Master Direction – Reserve Bank of India (Credit Derivatives) Directions, 2026