India preps margin regime as parliament debates netting law

India is preparing to introduce legislation intended to allow state-owned banks to apply close-out netting for derivatives, a change that also clears the way for the country’s central bank to publish its long-awaited margining regime for non-cleared derivatives. 

While margining rules have been rolled out globally in recent years, India has yet to issue directions due to an absence of close-out netting – the ability to offset gains and losses following a default.

In non-netting jurisdictions