RIL, L&T among companies sealing structured derivative deals
MUMBAI: Reliance Industries NSE 1.29 % (RIL) and Larsen & Toubro (L&T) on Monday cut structured derivative deals with ICICI Bank NSE 1.26 % and Barclays as India Inc enters into a new regime of covering currency and interest rate risks with innovative new instruments, three people familiar with the matter told ET.
Reserve Bank of India (RBI) had issued guidelines last year for local companies seeking to structure derivative deals like “Barrier Options” in the over-the-counter (OTC) market, in line with global best practices.
While the central bank directive covered both currency and rate markets, companies and banks appear to have started out with currency covers using “barrier options.” These are different from plain-vanilla option trades to cover currency risks.
