Commenting on this move, CB Bhave, Chairman, Sebi, said, “The participation of banks is important to make exchange-traded currency futures meaningful. By allowing banks to take part in this, RBI has given the necessary push to this product."

This is a very important compliment coming from one regulator to another and underscores the fact that there has been a lot of cooperation on this. Banks will be the key to this. Their gross open positions can be to the extent of USD 100 million, whereas other trading members like a brokerage firm will have a trading limit of USD 25 million. Banks themselves have a limit as to their net capital market open positions. This is a rule of thumb. At the moment, it is 25% of their networth. Whatever open positions they take in currency markets or currency futures will have to be within this overall position limit. So, the product will get a life. It will be meaningfully launched as and when the exchanges are ready.

Ravi Narain, MD, National Stock Exchange, or NSE, said the exchange is fully ready to launch currency futures. The membership drive for currency futures has begun. It will launch currency futures when adequate members join.

Excerpts from CNBC-TV18's exclusive interview with Ravi Narain:

Q: The regulators have really put the guidelines in place but how prepared is the exchange part of the business, how prepared is the NSE?

A: The systems at NSE are fully ready and we have recently commenced the membership drive. As soon as we have enough members ready to go live, we should be in a position to launch currency trading. The members require a little bit of paper work to be done, especially the banks who will still need to go back and take approval one by one, so we will start sort of pushing that from tomorrow morning.

Q: Is there a timeline as to when you expect this to go live?

A: We are absolutely ready, but the members have to come on board one by one and there is a requirement that a decent number of them ought to be ready to go live. So starting tomorrow morning we will start pushing that. I should not imagine that it would take too long for most of them to come on board. But as I said, the regulation requires the banks to take approval one at a time. So some amount of paperwork is left at the member end, which has to be still completed.