No Green Light for Banks, Insurers in Commodity Derivatives, Says Sebi Chief

Mumbai, May 4 (BNP): The banking and insurance regulators in India are not in favour of allowing banks and insurance companies to participate in commodity derivatives markets, according to Securities and Exchange Board of India (SEBI) Chairman Tuhin Kanta Pandey.

Speaking at the IMC Capital Market Conference 2026 in Mumbai, Pandey said that both the Reserve Bank of India (RBI) and the Insurance Regulatory and Development Authority of India (IRDAI) have valid concerns regarding such exposure and are not inclined to permit it at this stage.

He noted that the regulators believe the risks associated with commodity derivatives may not align with the core objectives and risk frameworks of banks and insurance firms.

Pandey also mentioned that the pension regulator had previously examined the possibility of allowing pension funds to participate in commodity derivatives markets, though he did not disclose any final decision on the matter.

Overall, the comments highlight a cautious regulatory approach toward expanding participation in commodity derivatives beyond traditional market participants.