Currency Derivatives

    Reserve Bank of India (RBI) vide circular dated August 06, 2008 has introduced trading in currency futures in India. As per RBI and SEBI notifications, members of recognized stock exchanges offering these products can offer these currency futures to their customers. RBI, SEBI and Exchanges guidelines govern the Banks participating in the currency futures segment.

    IndusInd Bank Ltd. is the clearing cum trading member with exchanges - NSE and MCX-SX. As of now we allow trading in currency futures on the NSE platform.

How it works

    This is a margin based product. Bank will be collecting the margin money as collateral in advance/up-front from all the customers eligible for trading in currency futures with the exchanges.  Collection of client margin is mandatory and daily reporting is required to be done to the Exchanges by the trading member. Mark-to-market (MTM) loss or gain is debited or credited to the customers Current Account/Savings Account (CASA account) on daily basis.

    The client can keep initial margin in the form of Cash and/or Fixed Deposit as collaterals towards margin for trading or taking exposures in the currency futures segment. Fixed Deposit has to be made with IndusInd Bank sourcing branch only. The MTM margin has to be always maintained in cash as it is settled with the respective exchanges on daily basis in cash. For Individual Clients the amount proposed is Rs.100,000 and for the corporate clients the amount proposed is Rs.500,000. The limit provided for trading is 80% of the available collaterals.

    For trading, the customers have the option to choose Online and offline mode. Online Trading is arranged through Trading Platform provided by Respective Exchanges.

    Offline Trading, clients can do call and trade with IBL Dealing Room. As this is the order driven market, price being determined by the underlying spot market it is advisable to do on line trading only. The clients will have to convincingly establish the customer identity to the dealers.

Business Rules

    Guidelines issued by Reserve Bank of India and SEBI on Know Your Customer (KYC) and In Person Verification requires intensive due diligence at the time of establishing relationship.

    Exchange & Clearing Corporation rules and guidelines on Membership Compliances, Margin, MTM Settlement, Collateral Management and internal audit.

    NISM Certification is a MUST for following Staff at Branches and at Corporate Offices.

    • Sale Representative at Branches.
    • CDS – Operational Staff.
    • Dealers – Executing Trades on behalf of the clients.

    The broad product features are as per the following:

    1. Resident Indians can trade in the currency pairs of USD-INR, EUR-INR, GBP-INR and JPY-INR
    2. It is a margin based product and the initial margin requirement is Rs.100000/- for individuals and Rs.500000/- for non-individuals.
    3. All contracts are of month-end maturity (1 month, 2months up to 12 months), the contract is known by its expiry date with a lot size of 1000/unit can be traded. In case of JPY/INR the lot size is 100000 units and quote is per 100 Yen
    4. All open contracts are Marked to Market (MTM) at settlement price by the exchanges at end of day.
    5. MTM profit/loss will be settled with customer on a daily basis
    6. Currency Futures as an asset class is considered as a moderate risk and high yielding portfolio given the two way volatility
    7. No requirement of underlying documents for trading in this product
    8. Fully regulated and transparent market place
    9. Counter party default risk eliminated due to participation of clearing corporation of the respective exchanges
    10. Narrow Bid-Ask spread on regular basis

Product Users

    The product is best suited for:

    1. Those who do not have access to OTC Markets and to individuals who wish to add currency futures into their asset portfolio
    2. Investors
    3. Hedgers
    4. Arbitrageurs

    How do I get Currency Derivative Account?

    Please walk-in to our nearest branch and our service executives will help you open a currency derivative account. It is ideal to have an CASA account with us as daily MTM settlements happens with the Exchanges and collaterals are monitored.

    Disclaimer: Currency Derivatives trading as per SEBI & RBI regulations. Kindly refer to the Rights & Obligations, Risk Disclosure Document, Guidance note, Policies and Procedures mentioned in the Account Opening Form.

    Policy for treatment of In-active Account in the currency derivative segment:

    “If the client has no open position and is inactive for more than six months then the account would be suspended for trading. If there is any credit available in the Client's margin account with the Bank, it would be refunded at the client's request. If the client is desirous of reactivating his account post the suspension, then he will have to send a written request for reactivation.”

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IBL Registration Number NSE: INE231308847
MCX Stock Exchange Limited: INE261314434 for dealing in currency derivatives segment