India's RBI caps banks' net open rupee positions at $100 million
Change
India's RBI capped banks' net open rupee positions in the onshore deliverable market at $100 million per bank at the end of each business day, effective April 10, 2026.
Why it matters
Banks can no longer offset large onshore dollar exposures with offshore hedges, forcing trading desks to liquidate or rebalance positions to meet the new daily constraint. That requirement increases the likelihood of immediate mark-to-market losses and operational stress as firms adjust positions to the tighter end-of-day limit.
Implications
- • Authorised dealer banks' foreign-exchange trading desks must reduce or close offshore non-deliverable forward positions before April 10, 2026 or be forced to unwind those hedges at large mark-to-market losses to comply with the end-of-day cap.
- • Banks' treasury and risk management teams must revise internal net open position limits, reprice hedges and implement end-of-day controls before April 10, 2026 or face forced liquidation of positions and potential regulatory breach.
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Source
Topics
Regulatory Actions Markets Banking Regulation Financial Services