I have a few NRE fixed deposits in India. The USD/INR FX spot rate offered by banks to repatriate this money to my US bank is terrible. Assuming NRI’s are allowed to trade Currency Futures. Is it possible for me to get a better exchange rate by just using Futures as a vehicle to repatriate at a better exchange rate? I am assuming of course that the future contract price has favorable terms.
If you see point no 3 (i) of the same circular it says:
“NRIs shall designate an Authorised DealerCategory-I bankwho is also a clearing member of the stock exchange/ clearing corporationfor the purpose of monitoring and reporting their combined positions in the OTC and ETCD segments.”
"Can NRI trade in Currency derivative segment of the Exchange?
Ans No, Only “a person resident in India” as defined in section 2(v) of FEMA
Act 1999 are allowed to participate in currency derivative segment of the
Exchange."
Zerodha will not be providing this as per the circular you have referred to.
Secondly for: “NRIs shall designate an Authorised DealerCategory-I bankwho is also a clearing member of the stock exchange/ clearing corporationfor the purpose of monitoring and reporting their combined positions in the OTC and ETCD segments.”
If you notice the 13 listed entities in that list all of them are scheduled commercial banks in India, what this means is essentially to even be on that list Zerodha will have to get a banking licence in India. And this is not a simple process, if it were the Ambani’s would have opened a bank before launching Jio!!
Here is a thought. I may be out of my depth to suggest this, but has Zerodha considered partnering with one of these banks to enable such trades?
These banks must have some sort of API to facilitate trading on the exchange. It is not of course trivial to implement such a system for you, but perhaps worth at least thinking about by folks in charge…