LatestCorporate Compliance 21 October 2026
RBI Removes Derivative Caps for Small Finance Banks in 2026
India's central bank, the RBI, has eliminated the non‑option derivative exposure limits that were imposed on small finance banks, with the change taking effect in the 2026 regulatory cycle. The decision is intended to ease compliance pressures, boost market liquidity, and bring these banks in line with wider financial sector reforms, while simplifying reporting requirements for derivative activities.
RBI has removed the non‑option derivative exposure limits for small finance banks, effective 2026.
- Limits were part of the 2023 compliance calendar and restricted banks' derivative positions.
- The change reduces reporting load and is expected to increase liquidity in the banking sector.
- Banks can now align their derivative strategies with broader market practices.
Need help understanding this update?
Connect with our domain experts instantly via WhatsApp for customized legal guidance.