RBI bars banks from offering rupee non-deliverable derivatives to residents, non-residents

This move by the RBI could impact the non-interest income of banks that actively deal in rupee NDDCs. While it aims to reduce currency volatility, it might also reduce hedging options for some entities.

Banks with significant forex operations might experience a slight negative bias; however, the overall impact on NIM and asset quality is expected to be minimal.

For Indian markets, this story mainly matters for HDFCBANK, ICICIBANK, SBIN and the banking, financial services pocket. The current signal is mixed, so traders should look for follow-through in price, volume, and sector breadth instead of reacting to the headline alone.

Watch whether the next market session confirms the setup described here: Major private sector bank, likely involved in derivative offerings, potential loss of business. Major private sector bank, likely involved in derivative offerings, potential loss of business. Also track volume confirmation, sector participation, and whether the move holds beyond the first reaction.

• •RBI directed authorised dealers to stop offering non-deliverable derivative contracts (NDDCs) in Indian Rupee.
• •The ban applies to both resident and non-resident entities, including local companies.
• •The decision was made on Wednesday, April 1, 2026.
• •Risk flag: Potential for reduced forex trading volumes for banks.
• •Risk flag: Uncertainty regarding alternative hedging mechanisms for affected entities.