Mumbai, Feb 9: The Reserve Bank of India (RBI) has decided to allow hedging of gold price risk in the Over the Counter (OTC) Market in the International Financial Services Centre (IFSC).The step has been taken with a view to providing flexibility to resident entities to hedge their exposures to gold price risk efficiently, the RBI said on Thursday.
Resident entities were permitted, in December 2022, to access recognised exchanges in the International Financial Services Centre (IFSC). The hedging facility will now provide them more flexibility and easier access to derivative products in hedging their exposure to gold prices, the RBI said.
Meanwhile, digital rupee users will soon be able to execute transactions in areas with limited internet connectivity as the RBI on Thursday announced that offline capability will be introduced on the Central bank digital currency (CBDC) pilot project.
Reserve Bank of India Governor Shaktikanta Das said that programmability-based additional use cases will be introduced as part of the pilot project.
RBI launched a pilot of the retail CBDC in December 2022 and achieved the target of having 10 lakh transactions a day in December 2023.
It can be noted that other payment platforms, especially the very popular Unified Payments Interface (UPI), already offer offline possibilities.
“it is proposed to introduce an offline functionality in CBDC-R (Retail) for enabling transactions in areas with poor or limited internet connectivity,” Das said while announcing the bi-monthly monetary policy review.
He said multiple offline solutions, which include both proximity and non-proximity based ones, will be tested across hilly areas, rural and urban locations for the purpose.
On the programmability front, he said that currently, the system enables Person to Person (P2P) and Person to Merchant (P2M) transactions using digital rupee wallets provided by pilot banks.
“It is now proposed to enable additional use cases using programmability and offline functionality,” he said.
The programmability feature will permit users like government agencies to ensure that payments are made for defined benefits, he said, adding that corporates will also be able to programme specified expenditures like business travel for their employees.