1. For retail clients, RBI does not allow direct spot trading. They can buy/sell foreign exchange using spot or forward instruments with banks over the phone. 2. In other words, customers of banks were receive pricing "off-market". 3. [October 12, 2017](RBI_Discussion%20Paper_20171012_Discussion%20paper%20on%20foreign%20exchange%20trading%20platform%20for%20retail%20participants.pdf) - RBI released a discussion paper on foreign exchange trading platform for retail participants 4. [June 6, 2019](https://rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=47226) - In the *Statement on Developmental and Regulatory Policies - June 2019*, which is released alongside the bi-monthly Monetary Policy statement, RBI announced its plan for the firs time, to rollout a forex retail module of the FX-Clear platform 5. [June 20, 2019](https://www.rbi.org.in/scripts/NotificationUser.aspx?Id=11597&Mode=0) - The RBI announced the launch of a retail trading platform called [FX-Retail platform](https://www.clearcorp.co.in/web/clearcorp/fx-retail1), operated by Clearcorp Dealing Systems (India) Limited (CDSL), a subsidiary of CCIL. 6. August 05, 2019 - Transactions started becoming available on FX-Retail. 1. A brief [write-up](https://www.clearcorp.co.in/documents/92952202/213284201/Writeup+on+FX-RETAIL+Platform.pdf/828171b4-972c-bc71-cf67-bbb809bb6f3b?t=1725964558443) on CCIL'S FX-Retail 2. It is an anonymous order matching electronic trading platform. 3. This gives them direct access to live rates in the inter-bank forex market. 4. Users with small transaction sizes, like individuals and SMEs, who have a need to buy or sell USD can place their bid/sell orders directly on this platform and avail direct access to live rates in the inter-bank forex market. 5. The aim was to create a market infrastructure to ensure fair and transparent pricing and protection of the retail user. 6. But at the same time, it requires concerted efforts by banks if the benefits of transparent and competitive pricing are to reach every user of the foreign exchange markets. 7. During 2019-20, ==[[RBI_Annual Report_2020.pdf#page=136&selection=167,0,167,67|major initiatives]]== were undertaken for improving access and pricing outcomes, especially for retail users in the foreign exchange market. 7. September 21, 2020 - The facility to book forward contracts on the FX-Retail platform was operationalized. 8. ==This is different from [RBI Retail Direct Scheme?](https://www.rbi.org.in/commonman/english/scripts/FAQs.aspx?Id=3337#AS1)==. 1. But both, Retail Direct Scheme for government securities and the FX-Retail platform for foreign currency, aim to enhance the Retail participation through operational convenience and transparency. ## Mentions of Retail FX in RBI Speeches 1. [October 14, 2021](https://rbi.org.in/scripts/BS_SpeechesView.aspx?Id=1133) 1. In his speech at FEDAI's annual day in 2021, T. Rabi, Deputy Governor Shri T Rabi Sankar:[^1] 2. As onshore and offshore financial markets get integrated, it should be ensured that price discovery in the domestic markets is efficient lest flows move to the offshore segment. Take the case of the Rupee exchange rate. It is market-determined with fairly tight bid-ask spreads in the interbank market. Major corporates also seem to benefit from tight pricing. Yet many entities, especially SMEs, small exporters, individuals, etc., are prone to over-pricing. Do processing charges and market risk for warehousing odd lot positions justify these spreads? 3. An effective way is to shift price discovery for the retail forex users to a platform. 4. While such a platform (FX Retail) has been developed, it appears that banks do not find it in their interest to navigate customers to use that platform. In this age of technology, it may not really be possible to shun superior technology for any length of time. There should be a debate on the use of the platform and banks should make an effort to give it a fair trial. 2. [December 27, 2022](https://rbi.org.in/scripts/BS_SpeechesView.aspx?Id=1346) 1. In his speech at Business Standard Summit in Mumbai, T. Rabi Sankar: [^5] 2. Although to a lesser extent, similar friction is occasionally exhibited even by regulated entities as can be seen in banks’ shunning of the FX Retail[4](https://rbi.org.in/scripts/BS_SpeechesView.aspx?Id=1346#F4) platform which would significantly improve the price for retail buyers/sellers of forex. 3. [March 9, 2023](https://rbi.org.in/scripts/BS_SpeechesView.aspx?Id=1354) 1. *In his speech [^4], Rajeshwar Rao, Deputy Governor, Reserve Bank of India: 2. The FX-Retail platform was introduced in a bid to shift price discovery to an automated platform. Banks do not, however, appear to have made efforts to encourage customers to use that platform. What is worrisome about the higher charges levied on the smaller customers, is the complete lack of transparency regarding the information on charges levied for such customers. We would definitely like to see concerted efforts by FEDAI and all banks in ensuring fair and transparent pricing for the less resourceful customers of the forex markets 4. [August, 2024](https://rbi.org.in/scripts/BS_SpeechesView.aspx?Id=1455) 1. *In his speech [^2], Shri Swaminathan J, Deputy Governor, Reserve Bank of India:* 2. The introduction of the FX-Retail platform in 2019 aimed to enhance transparency and fairness in retail foreign exchange transactions has seen only a limited success. I would request banks to take proactive steps to increase awareness and facilitate higher customer participation on the FX-Retail platform 5. [April 19, 2025](https://rbi.org.in/scripts/BS_SpeechesView.aspx?Id=1505) 1. *In his speech [^3], Sanjay Malhotra, Governor, Reserve Bank of India:* 2. FX-Retail, a transparent platform for undertaking FX transactions, has witnessed a lukewarm response and our feedback is that this is largely due to the reluctance of banks to offer the platform to their customers. 3. There are regulations in place to ensure transparency in pricing for retail customers including a mandate for disclosing the mid-market or interbank rate to customers. 4. As an industry, there is a need for market-makers to introspect and assess in what ways they can effectively deliver on these regulatory and fiduciary mandates. 6. [October 2025](https://rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=61379) - Access to FX-Retail Platform through Bharat Connect was launched with following details: 1. The FX-Retail platform of the Clearcorp Dealing Systems (India) Ltd. (Clearcorp) has been linked with Bharat Bill Payment System (Bharat Connect). 2. The linkage will enable individual customers maintaining bank accounts with participating banks to register and transact on the FX-Retail platform _via_ enabled digital channels of participating banks and through Third Party Application Providers (TPAPs) ### FX-Retail (Cash/Tom/Spot Settlements) 1. They have CASH/TOM/SPOT segments or call it settlements. 1. They are settled between bank and the customer, and are reported to CCIL 2. They are derived using spot rates and adjustment of (+/–) interest differential for one/two day (using the swap quotes/conversion quotes). There is no swap trade happening here 1. Cash/Spot swap quote - used to settle deal today 2. Tom/Spot swap quote - used to settle the deal tomorrow. 3. Example - CASH Segment Pricing (derived from Spot + CASH/SPOT conversion rates): 1. ASK in spot segment are prices at which sellers are ready to sell. 1. So the Top spot seller price = lowest spot rate someone is ready to deal to sell USD (but settled 2 days later) 2. BID in spot segment are prices at which sellers are ready to buy. 1. So the Top spot buyer price = highest spot rate at which someone is ready to deal to buy USD today (but settled 2 days later) 3. Now there is BID and ASK columns in CASH/SPOT swaps. 1. BID swap points - points that the swap buyer is providing (the counterparty willing to SELL USD today and BUY forward later). 1. BID column in Cash/Spot swaps: sorted by highest BID swap points on top. 2. ASK swap points = points that the swap seller is asking (the counterparty willing to BUY USD today and SELL forward later). 1. ASK column in Cash/Spot swaps: sorted by lowest ASK swap points on top. 4. With this, we calculate prices in CASH segments 1. BID Rate in CASH - People who are ready to buy dollars appear in this column; hence, it is the rate at which one can sell dollars in CASH (settled today) 1. CASH BID = Top (highest) SPOT buyer price − ASK swap points (lowest) in Cash/SPOT 2. Exporter/Seller of dollars can receive rupees today (settled today) at the BID rate in CASH segment. 3. We subtract the lowest ASK point in the cash/spot rate from top spot buyer price, so that the seller of dollars is penalized the least in the CASH market and thus the one ready to buy USD at highest rate becomes the top BID in the cash segment. 2. ASK rate in CASH - People who are ready to sell dollars appear in this column and hence the rate at which one can buy dollars in CASH, settled today 1. CASH ASK = Top (lowest) SPOT seller price − BID swap points (highest) in Cash/SPOT 2. Importers/Buyers of dollars can buy dollars today (settled today) at this price. 3. We subtract the highest BID point in the cash/spot rate from the top (lowest) seller price, so the buyer of dollar pays least, and hence the one ready to sell USD at lowest price becomes the top ASK in the cash segment. ## References 1. RBI. (October 12, 2017). *Discussion paper on foreign exchange trading platform for retail participants.* [Link](https://www.rbi.org.in/Scripts/PublicationReportDetails.aspx?UrlPage=&ID=879) 2. RBI. (August 21, 2020). *Annual Report 2019-20*. [[RBI_Annual Report_2020.pdf|pdf]] 3. T. Rabi Sankar. (October 14, 2021). *India’s Capital Account Management – An assessment* (Speech delivered by Shri T Rabi Sankar, Deputy Governor, Reserve Bank of India – October 14, 2021- at the Fifth Foreign Exchange Dealers’ Association of India (FEDAI) Annual Day). [Link](https://rbi.org.in/scripts/BS_SpeechesView.aspx?Id=1133) 4. T. Rabi Sankar. (December 27, 2022). *Fintech & Regulation* - Speech delivered by Shri T. Rabi Sankar, Deputy Governor, Reserve Bank of India - December 21, 2022 - at the Business Standard Summit in Mumbai. [Link](https://rbi.org.in/scripts/BS_SpeechesView.aspx?Id=1346) 5. M. Rajeshwar Rao. (Mar 09, 2023). *Self-Regulation in Financial Markets – Looking Back and Looking Ahead -* Keynote address delivered by Shri M. Rajeshwar Rao, Deputy Governor, Reserve Bank of India – March 05, 2023 - at the 17th FEDAI Annual Conference at Cairo, Egypt. [Link](https://rbi.org.in/scripts/BS_SpeechesView.aspx?Id=1354) 6. Swaminathan J. (August 22, 2024). *Local to Global: The Role of the Financial Sector in MSME's Development* - Speech by Shri Swaminathan J, Deputy Governor, Reserve Bank of India- August 21, 2024 - at the Annual Day of the Foreign Exchange Dealers Association of India (FEDAI) held in Mumbai* [Link](https://rbi.org.in/scripts/BS_SpeechesView.aspx?Id=1455) 7. Sanjay Malhotra. (April 19, 2025). *Keynote address at the 24th FIMMDA-PDAI Annual conference* - Shri Sanjay Malhotra on April 18, 2025. [Link](https://rbi.org.in/scripts/BS_SpeechesView.aspx?Id=1505) [^1]: T. Rabi Sankar. (2021, Oct 14). *India’s Capital Account Management – An assessment* \[Speech\]. Fifth Foreign Exchange Dealers’ Association of India (FEDAI) Annual Day on October 14th, 2021. Reserve Bank of India. [Link](https://rbi.org.in/scripts/BS_ViewBulletin.aspx?Id=20627) [^2]: Swaminathan J. (2024, August 22). *Local to Global: The Role of the Financial Sector in MSME's Development - Speech by Shri Swaminathan J, Deputy Governor, Reserve Bank of India*. Annual Day of the Foreign Exchange Dealers Association of India (FEDAI) held in Mumbai. [Link](https://rbi.org.in/scripts/BS_SpeechesView.aspx?Id=1455) [^3]: Sanjay Malhotra. (April 19, 2025) Keynote address at the 24th FIMMDA-PDAI Annual conference - Shri Sanjay Malhotra on April 18, 2025 \[Speech\]. [Link](https://rbi.org.in/scripts/BS_SpeechesView.aspx?Id=1505) [^4]: M. Rajeshwar Rao. (Mar 09, 2023). Self-Regulation in Financial Markets – Looking Back and Looking Ahead - Keynote address delivered by Shri M. Rajeshwar Rao, Deputy Governor, Reserve Bank of India – March 05, 2023 - at the 17th FEDAI Annual Conference at Cairo, Egypt. [Link](https://rbi.org.in/scripts/BS_SpeechesView.aspx?Id=1354) [^5]: T. Rabi Sankar. (December 27, 2022). *Fintech & Regulation* - Speech delivered by Shri T. Rabi Sankar, Deputy Governor, Reserve Bank of India - December 21, 2022 - at the Business Standard Summit in Mumbai. [Link](https://rbi.org.in/scripts/BS_SpeechesView.aspx?Id=1346)