On 19 October 2026, the Reserve Bank of India (RBI) deleted Section C, “Limits for Non-Option Derivative Contracts” (paragraph 37), from its 2025 Miscellaneous Directions for commercial banks and for small finance banks. The deletion took effect immediately. The notices do not restate the old limits and do not name a replacement.
What did the RBI change?
The RBI issued two amendment directions on 19 October 2026. Each says that Section C on “Limits for Non-Option Derivative Contracts” of Chapter IV of the relevant 2025 Directions (paragraph 37 of the Directions) “stands deleted”.
| RBI reference | Instrument | What it amends |
|---|---|---|
| RBI/2026-27/294 DOR.MRG.REC.No.248/00-00-020/2026-27 |
Commercial Banks – Miscellaneous Second Amendment Directions, 2026 | Commercial Banks – Miscellaneous Directions, 2025 |
| RBI/2026-27/295 DOR.MRG.REC.No.249/00-00-020/2026-27 |
Small Finance Banks – Miscellaneous Amendment Directions, 2026 | Small Finance Banks – Miscellaneous Directions, 2025 |
Neither notice amends any other paragraph.
Where did the section sit?
In the small finance bank text, Chapter IV groups several market-related instructions. Section A covers forward contracts in gold, silver and platinum, Section B covers reporting of corporate bond transactions, Section C was the derivative limits and Section D covers deferment of option premium.
The RBI’s consolidated Small Finance Banks – Miscellaneous Directions, 2025 (RBI/DOR/2025-26/204, updated as on 19 October 2026) now show Section C and paragraph 37 as “Deleted”. The neighbouring paragraphs keep their numbers, so paragraph 38 on deferment of option premium is unchanged.
Who is affected?
Commercial banks
Treasury, market-risk and compliance teams that applied the limits in paragraph 37 of the Commercial Banks – Miscellaneous Directions, 2025.
Small finance banks
The same, under the Small Finance Banks – Miscellaneous Directions, 2025.
Other regulated entities
These two notices do not cover them. Check the directions that apply to your own entity type.
When does it apply?
Both notices say the amended instructions “shall come into effect immediately upon issuance”, so 19 October 2026.
Practical steps, none of them required by the notices: search internal derivative policies, board-approved limit frameworks and risk reports for references to paragraph 37 and to Section C, and decide how they should read now.
Legal basis
- Power used
- Section 35A of the Banking Regulation Act, 1949, and other provisions enabling the RBI to issue such instructions
- Instruments
- Commercial Banks – Miscellaneous Directions, 2025, Chapter IV, Section C (paragraph 37); Small Finance Banks – Miscellaneous Directions, 2025, Chapter IV, Section C (paragraph 37)
- Issued by
- Department of Regulation, Central Office, Mumbai (signed by the Chief General Manager)
Key facts
| Authority | Reserve Bank of India (RBI) |
|---|---|
| Instrument | Commercial Banks – Miscellaneous Second Amendment Directions, 2026; Small Finance Banks – Miscellaneous Amendment Directions, 2026 |
| Issue date | 19 October 2026 |
| Effective date | Immediately on issuance (19 October 2026) |
| Applies to | Commercial banks and small finance banks |
| Status | In force |
| Official source | RBI notifications, rbi.org.in |
| Last verified | 21 October 2026, against the notices and the consolidated small finance bank directions |
Frequently asked questions
What were the limits that were deleted?
The notices do not say. They sat in paragraph 37 of the 2025 Miscellaneous Directions, so check that text for what applied up to 18 October 2026.
Has the RBI replaced the limits with new ones?
The two notices contain no replacement text. They only delete the section.
Are other derivative rules affected?
Only Section C and paragraph 37 are deleted. The neighbouring paragraphs are not amended by these notices, and other RBI requirements that apply to your derivative activity are not touched by them.
Is the change in force?
Yes. Both notices take effect immediately upon issuance, on 19 October 2026.
Sources (official)
- RBI/2026-27/294, Commercial Banks – Miscellaneous Second Amendment Directions, 2026, 19 October 2026 https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=13740&Mode=0
- RBI/2026-27/295, Small Finance Banks – Miscellaneous Amendment Directions, 2026, 19 October 2026 https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=13741&Mode=0
- RBI/DOR/2025-26/204, Small Finance Banks – Miscellaneous Directions, 2025 (updated as on 19 October 2026) https://www.rbi.org.in/Scripts/BS_ViewMasDirections.aspx?id=13105
- India
- Reserve Bank of India
- Banking Regulations
- Derivatives
- Small finance banks
- Commercial banks
Book a demo to see how each regulatory change becomes an executable action list, with immediate, safer compliance as well.
Agentic AI Built Exclusively for BFSI
Neurasix delivers rule-aligned agentic workflows – from regulatory intelligence to audit-ready outputs