RBI plans to enhance transparency through this move
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th-online Administrator
As a further step towards promoting greater transparency in the foreign exchange market, the Reserve Bank of India (RBI) is planning to ask Authorised Dealers (AD) to provide the details of transaction cost associated with foreign exchange “cash”, foreign exchange “tom” and foreign exchange “spot” contracts offered to retail users.
In this regard, the central bank has sought comments on “Draft Circular on Disclosure of Transaction Cost for Foreign Exchange Transactions” from banks, market participants and other interested parties by January 09, 2026 .
Transaction cost will include remittance fees, foreign exchange rate, currency conversion charges etc.
“While offering foreign exchange “cash”, foreign exchange “tom” and foreign exchange “spot” contracts to a retail user, Authorised Dealers shall provide to the user, details of the total transaction cost (showing all relevant costs and charges — sending and receiving fees including those of any intermediaries, foreign exchange rate and currency conversion charges), before entering into the contract and also include the same in the deal confirmation,” per the Draft circular.
RBI noted that to enhance transparency in the foreign exchange market, in January 2024, Authorised Dealers (who deal with foreign exchange) were mandated to provide the mid-market mark / bid and ask price of the foreign exchange derivative contract / foreign currency interest rate derivative contract before entering into the contract with a retail user and include the same in the deal confirmation / term sheet.
Published on December 9, 2025
