RBI Draft FX Risk Norms: Single Net Open Position for Banks
Why in the news
The Reserve Bank released draft changes to bank FX risk rules to match global standards and ensure uniform application.
Key facts
- Open for stakeholder feedback; expected from 1 April 2027.
- Single net open position (NOP) instead of separate onshore and offshore figures.
- Structural FX positions may be left out of NOP.
| Proposed change | Effect |
|---|---|
| Single NOP | Simpler reporting, easier comparison |
| Exclude structural positions | Less capital strain from long-term, non-trading exposure |
What counts as structural
Long-term foreign-currency stakes in overseas subsidiaries, branches and affiliated entities that are not consolidated. They are strategic, not meant for short-term gains.
Why RBI wants this
- Match global practice and fix inconsistencies.
- Allocate FX risk capital more accurately.
Exam angle
- Term: Net Open Position.