RBI Revises Forex Exposure Rules For Banks

The Reserve Bank of India (RBI) on Wednesday revised the framework for calculating and reporting foreign exchange exposures, simplifying some existing requirements and providing relief on certain structural foreign currency positions.

The revised rules will come into effect from 1 April 2027. According to the RBI, the changes are aimed at bringing India's regulatory framework closer to global Basel standards and ensuring a more consistent treatment of foreign exchange exposures across banks.

Market participants said the changes could free up capacity for banks and support trading activity.

Key Changes To NOP Calculation

Under the revised rules, banks will no longer need to calculate onshore and offshore net open positions (NOP) separately. The RBI has also allowed accumulated surpluses from overseas operations to be included in NOP calculations.

In addition, banks will be required to maintain forex risk capital charges against actual NOP. The central bank has also modified the shorthand method used to measure exposure by treating gold positions separately.

Also Read - Market Midday, 25 June 2026: Sensex, Nifty Extend Gains

Structural Investments Get Exemption

A key clarification in the final rules allows banks to exclude eligible structural foreign currency investments from NOP calculations on both a standalone and consolidated basis.

These include capital investments as well as accumulated or unremitted earnings in overseas subsidiaries, branches, joint ventures and associates, provided they are non-dealing positions.

According to market participants, the exemption could create additional room for banks to take positions without breaching regulatory limits, improving their overall trading capacity.

Sources:

The Economic Times

CNBC TV18