The Reserve Bank of India (RBI) is moving forward with a proposal requiring banks to report offshore rupee derivative trades, despite objections from lenders. This initiative aims to mandate that banks report at least 70% of such transactions by February 2027, enhancing transparency in a market that has contributed to currency volatility. Currently, domestic banks report all derivative transactions, while foreign banks only account for those executed by their Indian units. The RBI argues that this change will facilitate better price discovery and level the playing field between domestic and foreign banks. The offshore forward market significantly impacts the rupee's exchange rate, with cross-border trades reaching about $60 billion, representing two-thirds of total turnover in the outright forward market as of April 2025. However, foreign banks have expressed concerns that the new reporting requirements could conflict with regulations in their jurisdictions, complicating the implementation of the RBI's proposal. The RBI's efforts come in light of recent volatility in the foreign exchange market, with the rupee recovering to approximately 92.50 per dollar from a low of nearly 95.