RBI Proposes Revised Guidelines for Banks' Foreign Exchange Risk Capital Requirements

The Reserve Bank of India (RBI) has proposed changes to how banks calculate and maintain capital for foreign exchange risk, aligning guidelines more closely with Basel Committee standards. Banks must meet forex risk capital requirements daily at both consolidated and standalone levels. The revisions include eliminating separate offshore and onshore net open position calculations, incorporating accumulated overseas surpluses, and exempting certain positions and securities from capital charges. These updates aim to ensure consistent implementation across regulated entities.