Chapter IIID — Derivatives and Money Markets

Section 45W: Power of Bank to regulate transactions in derivatives, money market instruments, securities, etc.

Reviewed by CA Nikhil Gupta · Last reviewed 18 September 2026

Section 45W authorises RBI to determine policy and give directions to agencies dealing in derivatives, money-market instruments, Government securities and other instruments within the statutory scope, including directions on eligibility, trading, reporting and related matters.

Operative provisionOfficial sources mappedProvision-specific decode

Finin2min - Section 45W in 2 minutes

Legal effectSection 45W authorises RBI to determine policy and give directions to agencies dealing in derivatives, money-market instruments, Government securities and other instruments within the statutory scope, including directions on eligibility, trading, reporting and related matters.

Operative ruleThe section is the central enabling power for many RBI financial-market Directions; sub-powers should be matched to the product and agency concerned.

Connected lawCurrent compliance therefore depends on the live product-specific Direction, not on the bare section alone.

File evidenceMaintain the product classification, eligible-user/counterparty test, dealing mandate, trade documentation, platform/venue requirement and required RBI/CCIL reporting.

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.

Rule 1

The section is the central enabling power for many RBI financial-market Directions

Rule 2

sub-powers should be matched to the product and agency concerned.

Connected rule

Current compliance therefore depends on the live product-specific Direction, not on the bare section alone.

Worked practical example

Facts. A treasury desk entering a new derivative should first map the product to the applicable RBI Direction under Section 45W and configure eligibility/reporting controls before the first trade.

Compliance points and common mistakes

Do not decide the issue from the heading alone. Map the facts to the operative words of Section 45W and to each relevant subsection, clause, proviso or explanation shown above.
Keep the statutory question separate from the operational overlay. Current compliance therefore depends on the live product-specific Direction, not on the bare section alone.
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

RBI Financial Markets Directions IndexCurrent RBI directions for derivatives, money markets and related financial-market products; read each product direction with sections 45U–45X.

Questions and answers

What is the purpose of Section 45W?

Power of Bank to regulate transactions in derivatives, money market instruments, securities, etc.: Section 45W authorises RBI to determine policy and give directions to agencies dealing in derivatives, money-market instruments, Government securities and other instruments within the statutory scope, including directions on eligibility, trading, reporting and related matters.

Which statutory limb should be checked first?

Rule 1 - The section is the central enabling power for many RBI financial-market Directions

What is the next legal boundary?

Rule 2 - sub-powers should be matched to the product and agency concerned.

What record should support the conclusion?

Section 45W file evidence: Maintain the product classification, eligible-user/counterparty test, dealing mandate, trade documentation, platform/venue requirement and required RBI/CCIL reporting.

Primary sources

Source control for Section 45W: 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.