RBI Proposes Revised Forex Risk Rules Aligning Capital Charges with Basel Standards

The Reserve Bank of India (RBI) has proposed revisions to rules governing banks' foreign exchange risk management, aligning them with Basel Committee standards. Key changes include eliminating separate offshore and onshore net open position (NOP) calculations, incorporating accumulated overseas surplus into NOP, and maintaining capital charges on actual NOP. Banks must compute forex risk capital continuously at consolidated and standalone levels, with new norms effective from April 1, 2027. Structural forex positions may be exempted under strict conditions documented in risk policies.