Chapter IIID — Derivatives and Money Markets
Section 45U: Definitions
Reviewed by CA Nikhil Gupta · Last reviewed 18 September 2026
Section 45U supplies definitions for Chapter IIID, including derivatives, money market instruments, repo, reverse repo and other market concepts used in Sections 45V to 45X.
Operative provisionOfficial sources mappedProvision-specific decode
Finin2min - Section 45U in 2 minutes
Statutory structure and clause / subsection decode
This map separates the operative limbs of this provision so thresholds, powers, conditions and exceptions are not collapsed into a single summary.
Scope
Section 45U supplies definitions for Chapter IIID, including derivatives, money market instruments, repo, reverse repo and other market concepts used in Sections 45V to 45X.
Operative limb
The definitions establish the legal perimeter of RBI's financial-market power and can differ from commercial product labels.
Legal boundary
Before applying a product Direction, classify the instrument and participants using Section 45U and the definitions in the current RBI Direction.
Worked practical example
Facts. A structured transaction marketed as a 'forward purchase' may still be a derivative if its value and settlement characteristics satisfy the statutory definition.
Compliance points and common mistakes
- Do not decide the issue from the heading alone. Map the facts to the operative words of Section 45U and to each relevant subsection, clause, proviso or explanation shown above.
- Keep the statutory question separate from the operational overlay. Before applying a product Direction, classify the instrument and participants using Section 45U and the definitions in the current RBI Direction.
- Do not convert an exception, exemption or discretionary RBI/Government power into an automatic entitlement. Record the authority, conditions and effective date.
- Where the provision is historical, omitted or repealed, state that status prominently and do not present it as a current compliance obligation.
Connected provisions and instruments
Questions and answers
What is the purpose of Section 45U?
Definitions: Section 45U supplies definitions for Chapter IIID, including derivatives, money market instruments, repo, reverse repo and other market concepts used in Sections 45V to 45X.
Which statutory limb should be checked first?
Scope - Section 45U supplies definitions for Chapter IIID, including derivatives, money market instruments, repo, reverse repo and other market concepts used in Sections 45V to 45X.
What is the next legal boundary?
Operative limb - The definitions establish the legal perimeter of RBI's financial-market power and can differ from commercial product labels.
What record should support the conclusion?
Section 45U file evidence: Product files should identify underlying, settlement mechanics, maturity, counterparty type, trading/OTC venue and the RBI Direction used.
Primary sources
- Department of Financial Services - consolidated RBI Act (states amendments through Finance Act, 2022)
- India Code - Reserve Bank of India Act, 1934
Source control for Section 45U: use the official consolidated RBI Act for the statutory text and footnotes, then separately reconcile any post-Finance Act 2022 amendment, commencement notification or RBI instrument relevant to the event date.