The Reserve Bank of India has today placed on its website the Report of the Working Group on Interest Rate Futures for public comments. Interest Rate Futures (IRF) were introduced in India in June 2003. In the context of continued financial market developments, the Annual Policy Statement of April 2007 had proposed to set up a Working Group under the aegis of the Technical Advisory Committee on Money, Foreign Exchange and Government Securities Markets. Accordingly, on August 9, 2007, the  Technical Advisory Committee constituted a Working Group on Interest Rate Futures (Chairman: Shri V K Sharma, Executive Director, RBI) to review the experience gained with IRF with particular reference to product design issues and make recommendations for activating the instrument.

The Group was also required to revisit the recommendations of the earlier Committees in this area and examine regulatory requirements as well as the scope and extent of participation of non-residents while making its own recommendations. The Reserve Bank had also, on October 30, 2007, announced in its Mid-term Review of the Annual Policy that the Report would be placed in the public domain (para 124) for public comment.

The Report has, inter alia, taken into account the views of market participants as well as the international experience. The recommendations of the Group were presented to the Technical Advisory Committee (TAC) for Money, Foreign Exchange and Government Securities Markets. The suggestions made and views expressed by the TAC are incorporated in the Report.

Comments and suggestions on the Report may please be addressed to the Chief General Manager, Financial Markets Department, Reserve Bank of India, Central Office, Mumbai or through email.

G. Raghuraj
Deputy General Manager

Press Release: 2007-2008/1153