RBI issues draft rules on novation of OTC derivative contracts to streamline and rationalise regulatory processes in India.

• Novation replaces a market maker in OTC deals, creating a new contract with a third-party transferee at market rates.
• FIMMDA and FEDAI to draft standard novation agreements based on global best practices and industry consultations.
• Market participants can alternatively use a standard master agreement for novation as per the RBI’s 2025 draft guidelines.