Banks seek clarification on RBI forex measures

What happened: The Foreign Exchange Dealers' Association wrote to the RBI seeking clarification on new forex derivative rules, including a $2 million notional value limit per client and a 20% levy. Key numbers: $2 million notional limit per client. 20% levy. Import forward dollar purchases costlier by 12 to 13 paise per month and about 150 basis points in interest rates. Why it matters: Banks say they lack clarity on how to calculate exposures across banks, classify hedges, and treat the FERR balance, and have asked for more time to make system changes and update policies.

The Foreign Exchange Dealers' Association wrote to the RBI seeking clarification on new forex derivative rules, including a $2 million notional value limit per client and a 20% levy.

Banks say they lack clarity on how to calculate exposures across banks, classify hedges, and treat the FERR balance, and have asked for more time to make system changes and update policies.