The Reserve Bank of India has removed Section C of Chapter IV, covering limits for non-option derivative contracts, from its 2025 directions for commercial banks. The amendment took effect immediately upon issuance on October 19, 2026.
BKK Bureau, New Delhi | 20 October 2026 | 6:27 AM IST
The Reserve Bank of India has amended its directions for commercial banks by deleting the section dealing with limits for non-option derivative contracts. The change was notified on October 19, 2026, through the Reserve Bank of India (Commercial Banks – Miscellaneous) Second Amendment Directions, 2026.
The amendment removes Section C of Chapter IV from the Reserve Bank of India (Commercial Banks – Miscellaneous) Directions, 2025. The section is identified in the notification as the part covering “Limits for Non-Option Derivative Contracts.”
The revised instructions became effective immediately when the notification was issued. The RBI’s notice does not provide a deferred implementation date or a separate transition period for the deletion.
The notification was issued under Section 35A of the Banking Regulation Act, 1949, along with other enabling legal provisions. The RBI said it had reviewed the relevant framework and was satisfied that issuing the amendment was necessary and expedient in the public interest.
What has changed
- Section C of Chapter IV in the 2025 commercial-bank directions has been deleted.
- The deleted section concerned limits for non-option derivative contracts.
- The amendment is effective immediately from October 19, 2026.
- The notification is titled the Second Amendment Directions, 2026.
The operative change is therefore a structural amendment to the RBI’s directions: the identified section on limits for non-option derivative contracts no longer forms part of the cited Chapter IV framework. The notice records the deletion as the specific amendment rather than setting out a replacement section in the notification.
The order was signed by Sunil T S Nair, Chief General Manager, on behalf of the Reserve Bank of India. It refers specifically to the 2025 directions and identifies paragraph 37 as the location of the section being removed.
For commercial banks, the relevant compliance reference has consequently changed from the version of the 2025 directions that included Section C to the amended version issued by the RBI. The immediate effective date means the amendment applies from the date of issuance rather than from a later notified date.
The RBI’s notification provides the formal legal and operational details of the change, including the affected chapter, paragraph and subject area. Any assessment of the effect on individual derivative transactions or bank-level compliance would depend on the applicable provisions and facts of those transactions.
Why it matters
The notification immediately changes the text of the RBI’s commercial-bank directions by removing the section governing limits for non-option derivative contracts. Banks and compliance teams must use the amended directions as the applicable regulatory reference from October 19, 2026.
Source: Reserve Bank of India
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