Why is the RBI declaration required to trade in currency derivatives?

As per the RBI circular (PDF), traders are mandated to compulsorily have an underlying contracted exposure to foreign currency if they want to trade in the currency derivatives segment.

Zerodha will collect the RBI declaration when the currency segment is activated. The mobile number must be linked with Aadhaar to activate the segment online. To activate the segment, follow these steps:

1. Login to console.zerodha.com.
2. Click on Account.
3. Click on Segment.
4. Click on NSE - Currency Exchange and BSE - Currency Exchange.
5. Click on Continue.
6. Select the income range.
7. Click on Choose file and upload an income proof.
8. Accept the terms and conditions.
9. Click on Proceed to e-sign and then on Sign now.
10. Accept the terms and conditions, enter the Aadhaar number and click on Send OTP.
11. Enter the OTP and click on Verify OTP.
    
    

If the mobile number is not linked to Aadhaar, clients can follow these steps:

1. Print and sign the RBI declaration form (PDF).
2. Courier it to:
   
   Zerodha Customer Support Centre,
   680, Fortuna 1, 15th Cross Road,
   8th Main Road, 2nd Phase, J. P. Nagar,
   Bengaluru, Karnataka, 560078
   

Did you know?

• Clients must enable the segment on Console by 8 P.M to trade in currencies the next trading day. If the declaration is being couriered, it can take up to 48 working hours for the segment to be enabled.
• The equity segment must be active to enable the currency segment.
• Clients cannot enable currency and commodity segments at the same time. Separate requests must be placed. To learn how to activate commodity, see How to open a commodity account?