MUMBAI, June 20: The first five-year dated rupee currency swaps were booked in India with HDFC Bank booking two 5-year dollar/rupee currency swaps of Reliance Industries Ltd (RIL) and IPCL for $ 17 million (Rs 60 crore). This is the first such deal after Reserve Bank of India (RBI) permitted banks to run a swap book and corporates to swap a rupee liability into a foreign currency liability.In April, the RBI allowed banks to deal in swaps, without its permission for tenors over six months. The RBI also in the same credit policy, initiated steps to develop a deeper, liquid rupee term market. In the past corporates and banks needed prior regulatory approval to book dollar/rupee currency swaps.``The recent liberalisation steps of the RBI now allow corporate and banks to deal in these derivative transactions relatively freely to manage their assets and liabilities in a more efficient manner,'' HDFC Bank said. By doing these swaps RIL and IPCL were able to hedge the risk arising from a change in the value of rupee and to swap rupee borrowings into a foreign currency denominated liability. HDFC Bank structured the transactions so that the bank was counterpart to both the clients. The bank assumed the counterparty credit risk besides arranging and structuring the transaction.
