The Reserve Bank of India has introduced Master Direction on Credit Derivatives to regulate this emerging market segment effectively. The directions will impact all participants in the credit derivatives market.
RBI Issues Credit Derivatives Directions, 2026
On June 25, 2026, the Reserve Bank of India (RBI) released the Master Direction – Reserve Bank of India (Credit Derivatives) Directions, 2026. This comes as part of the strategies proposed in the Bi-monthly Monetary Policy Statement for 2025-26, aiming to promote the development of credit derivatives markets.
The document outlines the regulatory framework for credit derivatives, including the introduction of derivatives on credit indices and total return swaps. These directions are anticipated to provide clarity to market participants and facilitate better risk management practices in the credit derivatives space.
Practitioners in banking and financial services must prepare for compliance with these directions, as they create a structured framework for credit derivatives. Institutions engaging in credit derivatives should review their risk management strategies and legal compliance in light of these new requirements.