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Informist, Monday, Mar. 30, 2026

NEW DELHI – Banks have urged the Reserve Bank of India to ease the rules announced on Friday post market hours, which mandate lenders to ensure that net open rupee positions in the onshore deliverable foreign exchange market do not exceed $100 ‌million at the end of each business day, latest by Apr. 10. The RBI met senior treasury officials on Saturday to discuss the repercussions of the new guidelines, four currency dealers said. 

Net open position is defined as the residual currency exposure a bank carries after offsetting all its positions. Under extant norms, banks can set net open position limits within 25% of the total capital. Market participants' estimate for such positions is around $35 billion-$40 billion as of Friday, with large banks holding around $5 billion worth of positions.

The central bank's directions came as the Indian currency came under extreme downward pressure in the face of a surge in crude oil prices and strong foreign portfolio outflows after the breakout of the war in West Asia on Feb. 28. As on Friday, the Indian currency was down over 4% against the dollar so far in March, hitting a record low of 94.8425. 

Dealers said the tighter norms on foreign exchange transactions would prompt traders to unwind arbitrage trades between the non-deliverable forward and onshore markets, leading to banks dealing with sharp losses. Banks will be forced to sell dollars in the onshore market to unwind bets to comply with the new norms, leading to a sharp appreciation of the rupee on Monday, dealers said. 

Market participants said banks have asked the RBI to defer the Apr. 10 deadline. "These are large positions we are talking about. It will be chaotic to just unwind them in such a short time," a dealer at a private sector bank said. "If this happens, there will be huge losses on banks' books." Banks have also requested the central bank to consider applying the new norms only to fresh bets, dealers said. 

Market participants now expect the central bank to come up with some relaxation or clarification on the latest norms. "I think there will be some caution in the market as people await some relief from the RBI," a dealer at a foreign bank said. "We may not see the full impact of the decision in one day."  End

US$1 = INR 94.81

Reported by Pratiksha

Edited by Avishek Dutta

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