An over-the-counter (OTC) derivative is a financial contract that is arranged between two counterparties but with minimal intermediation or regulation. OTC derivatives do not have standardized terms and they are not listed on an asset exchange.

The most popular OTC market is forex, where currencies are bought and sold via a network of banks, instead of on exchanges. … Stocks and other financial instruments can also be traded OTC – this includes derivatives such as swaps and forward contracts.

Transaction TypeUnderlying Asset
FORWARDForward
OPTIONFX Option,
Dual Currency Deposit,
European Type Option,
Knock In and Knock Out FX Option

Derivatives are used with hedging or yield enhancing purposes. DCD (Alternative Currency), FX Option, Gold Option, Forward are the OTC (over-the-counter) derivative products that we offer to our customers. Alternative Currency is compatible with customers whose risk profile is “Very High Risk”. Risk Tolerance Questionnaire and Suitability Test is required to execute transactions in Derivatives.

To find out your risk profile and specify suitable investment products for you with your branch, you can visit and fill Risk Tolerance Questionnaire and Suitability Test.

DCD (Alternative Currency)

Alternative Currency: It is an investment product that is a combination of a currency option and a time deposit taken as collateral. With an Alternative Currency option, the customer sells the bank the right to exercise the option in return for enhanced yield by accepting the foreign exchange risks. Alternative Currency product might offer higher returns than regular time deposits if the foreign exchange markets move in line with the customer’s expectations. With Alternative Currency, it is possible to obtain high return by taking exchange rate risk; however the value of the customers’ investment at maturity might be less than the amount initially invested (there might be loss of capital in original currency due to exchange rate movements).