RBI/2011-12/243
DBOD.No.BP.BC.  44 /21.04.157/2011-12

November 2, 2011

The Chairman and Managing Directors/ Chief Executive Officers of
All Scheduled Commercial Banks (excluding RRBs and LABs),
All India Term-Lending & Refinancing Institutions &
Primary Dealers

Dear Sir,

Comprehensive Guidelines on Derivatives: Modifications

Please refer to our Circular DBOD No.BP.BC.86/21.04.157/2006-07 dated April 20, 2007 on Comprehensive Guidelines on Derivatives. The guidelines with regard to suitability and appropriateness policy for offering of derivative products to users, as outlined in paragraph 8.3 of the said circular, were reviewed in the light of the experience gained in implementation of the guidelines over last four years, and the revised version of the paragraph 8.3 was issued vide circular DBOD.No. BP.BC.27/21.04.157/2010-11 dated August 2, 2011.

2. In the light of suggestions made by FEDAI and other market participants, paragraph 6 of the circular dated April 20, 2007 and the revised paragraph 8.3 of the circular dated August 2, 2011 have been modified. The revised paragraphs are furnished in the Annex (deletions indicated in strikethrough and additions in bold italics).

3. Revised guidelines will be effective from January 1, 2012.

Yours faithfully,

(Deepak Singhal)
Chief General Manager-in-Charge