On Monday, the Reserve Bank of India (RBI) issued a report detailing a new process for banks which offer derivatives products. Financial institutions that offer derivatives deals to companies will have to be supported by the corporate board to complete transactions, reports The Economic Times.

Moreover, companies that ink these deals will have to detail their mark-to-market loss (MTM) on a regular schedule. They'll also have to submit detailed board resolutions to the banks selling the derivatives deals, according to the news outlet.

The goal of the proposal is to reduce disputes between companies and banks, and limit risk for banks. Moreover, the move will hopefully keep these complex products from being mis-sold to local companies, reports The Wall Street Journal. The rules are also meant to disallow foreign banks that can't price products locally from becoming market makers.

According to the Times, PricewaterhouseCooper partner Kumar Dasgupta said, "This is a good thing. It brings about proper risk management and will stop a lot of speculative positions being taken without people thinking it through. Companies need to think about the benefits and risks involved in a complex derivative."

The resolutions that are submitted to the corporate boards must specify which products will be transacted, detail limits, and detail which person has the authority to sign agreements.