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<h1>RBI's 2020 Regulations on Margins for Derivative Contracts: Key Guidelines for Managing Margins and Interest Transactions.</h1> The Foreign Exchange Management (Margin for Derivative Contracts) Regulations, 2020, issued by the Reserve Bank of India, establish guidelines for handling margins in derivative contracts to ensure orderly foreign exchange market development. Effective from their publication date, the regulations define key terms such as 'authorised dealer,' 'derivative,' and 'margin.' They prohibit margin posting or collection and interest transactions on margins without Reserve Bank approval, except as permitted. Authorised dealers can manage margins for permitted derivative contracts with non-residents, both in India and abroad, following Reserve Bank specifications. The regulations also allow interest transactions on these margins.