The draft proposes a comprehensive overhaul of the Net Open Position (NOP) framework for foreign exchange risk. The key proposals include elimination of separate onshore and offshore NOP computation, inclusion of accumulated surplus of overseas operations in NOP, and requirement to maintain forex risk capital on actual NOP on a continuous, end-of- day basis. It also revises the shorthand method for NOP calculation by treating gold separately, permits limited exclusion of qualifying structural foreign exchange positions subject to strict conditions, and standardises exclusions for capital-deducted items and non-performing securities. Most entities would apply a 9% capital charge on overall NOP, while Standalone Primary Dealers would apply a higher 15% charge.
(Link: Press Release RBI Draft Directions Dated 14/01/2026)
(Link: Commercial Banks Prudential Norms Draft Dated 14/01/2026)
(Link: Small Finance Banks Prudential Norms Draft Dated 14/01/2026)
(Link: Regional Rural Banks Prudential Norms Draft Dated 14/01/2026)
(Link: Local Area Banks Prudential Norms Draft Dated 14/01/2026)
(Link: Urban Cooperative Banks Prudential Norms Draft Dated 14/01/2026)
(Link: Rural Cooperative Banks Prudential Norms Draft Dated 14/01/2026)