PR No. 2025-2026/1925; Dated: 14.01.2026
1. Introduction
Reserve Bank of India (RBI) has issued draft amendment directions on the computation of Net Open Position (NOP) and the calculation of capital charge for foreign exchange (FX) risk, inviting public comments.
2. Objective Of The Draft Directions
The draft aims to strengthen the prudential framework for managing FX risk by ensuring consistent and comprehensive computation of net open positions. It seeks to align capital adequacy with the actual risk exposure arising from foreign exchange fluctuations.
3. Computation At Group And Consolidated Level
Under the proposed framework, banks are required to compute their net open positions and maintain capital charge for FX risk not only at the standalone level but also at the group or consolidated level, enhancing overall risk oversight.
4. Continuous Capital Requirement
The draft directions mandate that banks must meet capital requirements for foreign exchange risk on a continuous basis. This means compliance must be ensured at the close of each business day, rather than at periodic reporting intervals.
5. Conclusion
The proposed directions reflect RBI’s focus on strengthening risk management practices in the banking sector. Stakeholders may submit comments on the draft by February 3, 2026, after which the final framework is expected to be notified.
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