Quick Summary
The Reserve Bank of India (RBI) has issued the Master Direction - Reserve Bank of India (Credit Derivatives) Directions, 2026. The new framework seeks to facilitate the introduction of credit index derivatives and total return swaps (TRS) on corporate bonds, providing market participants with additi
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FAQ :
The RBI's new Master Direction concerns Credit Derivatives, specifically facilitating the introduction of credit index derivatives and total return swaps on corporate bonds.
The Master Direction - Reserve Bank of India (Credit Derivatives) Directions, 2026 was issued on 25 June 2026.
The Master Direction enables the introduction of Credit Index Derivatives and Total Return Swaps (TRS) on Corporate Bonds.
Credit Index Derivatives allow market participants to hedge or take exposure to the credit risk of a basket of debt instruments.
Total Return Swaps (TRS) on Corporate Bonds enable the transfer of both credit risk and market returns associated with corporate bond investments.
The new framework is expected to improve credit risk management, enhance liquidity and depth in India's corporate bond market, and offer sophisticated hedging instruments.
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