Commodity hedging delegation to authorised banks permits listed firms to hedge international commodity price risk under strict monitoring. Reserve Bank delegates to accredited commercial bank Authorised Dealers the authority to permit listed Indian companies to hedge commodity price risk internationally (excluding gold, silver, petroleum and products), subject to ADs meeting prudential eligibility norms, obtaining Reserve Bank approval to act, and securing board resolutions from corporates. Permissible transactions focus on off-set hedge using exchange-traded futures and options (and OTC where warranted), with Special Account settlement, broker report verification to ensure backing by physical exposure, AD monitoring to prevent speculation, annual bank reporting of corporates hedged, and statutory auditor certification of compliance and internal controls.
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Provisions expressly mentioned in the judgment/order text.
Commodity hedging delegation to authorised banks permits listed firms to hedge international commodity price risk under strict monitoring.
Reserve Bank delegates to accredited commercial bank Authorised Dealers the authority to permit listed Indian companies to hedge commodity price risk internationally (excluding gold, silver, petroleum and products), subject to ADs meeting prudential eligibility norms, obtaining Reserve Bank approval to act, and securing board resolutions from corporates. Permissible transactions focus on off-set hedge using exchange-traded futures and options (and OTC where warranted), with Special Account settlement, broker report verification to ensure backing by physical exposure, AD monitoring to prevent speculation, annual bank reporting of corporates hedged, and statutory auditor certification of compliance and internal controls.
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