Abstract:
Derivatives, a term which denotes instruments like forwards,
futures, options, swaps, etc., constitute an important segment of
financial market in the developed economies. They have gained
ground the world over as one of the most sought after financial
market hedging instruments. Though, derivatives trading
existed in India from quite some time back, modern genre of
financial derivatives made their formal appearance on the
Indian scene only recently. Economic liberalization and
resultant growth in the Indian financial sector has created a
huge appetite for newer instruments and derivatives are one of
them. Such types of complex financial instruments pose a real
challenge for the reg1l.Zators to tame. This paper attempts to
explore the meaning, nature and significance ofderivatives and
the legal structure surrounding the use of Over-The-Counter
Derivatives in ihe Indian Banking System.
