The Reserve Bank of India (RBI) has now allowed Indian banks to freely offer foreign exchange prices out of their books to non-residents at all times either using a domestic sales team or through overseas branches.
On 30 July, RBI's task force on offshore rupee had submitted its recommendations on measure to incentivise non-residents' access to the onshore foreign exchange market in its report.
Rupee derivatives (with settlement in foreign currency) will also be traded in International Financial Services Centres (IFSCs).
To curb exchange risk for Indian residents, the RBI has been taking steps to popularize cross-border transactions in Indian rupee (INR) like those in external commercial borrowing (ECB), trade credit and exports and imports.
The Central Bank has also decided to enhance the scope of non-interest bearing special non-resident rupee (SNRR) account by permitting persons resident outside India to open such accounts to facilitate rupee denominated ECB, trade credit and trade invoicing.
Directions for implementing the latest announcements will be later issued by the RBI in consultation with the central government and other regulators. They are likely to be issued in a month's time.