India's RBI caps banks' net open rupee positions at $100m
FX trading desks at authorised dealer banks must cap end-of-day rupee NOP at $100m
Change
India's RBI requires authorised dealers to limit end-of-day net open positions in the onshore deliverable rupee market to $100 million, with compliance required by April 10, 2026.
Why it matters
RBI's cap makes authorised dealers' rupee risk limits a binding tool for exchange-rate management and orderly market development. Large banks that previously held about $1 billion of overnight rupee exposure across onshore and offshore markets must cut those overnight exposures to meet the new end-of-day boundary.
Implications
- — FX trading desks at authorised dealer banks must reduce or hedge overnight net rupee exposures to at or below $100 million by April 10, 2026 — failure will place the bank in breach of RBI risk-management rules and expose it to supervisory enforcement.
- — Risk and compliance teams at authorised dealer banks must implement daily end-of-day controls and reporting immediately to prevent recorded NOP-INR above $100 million — failure will produce inaccurate regulatory returns and trigger supervisory scrutiny.
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Source
View on Economic Times