Major Indian banks are pushing the Reserve Bank of India to reconsider its uniform $100 million cap on net open positions, arguing the blanket rule fails to account for institutional differences.

Major Indian banks are pushing the Reserve Bank of India to reconsider its uniform $100 million cap on net open positions, arguing the blanket rule fails to account for institutional differences. The RBI imposed the restriction during rupee volatility to curb speculation, but banking officials now contend a one-size-fits-all approach is impractical. They propose linking exposure limits to each bank's size and capital flows instead. The current cap prevents banks from offsetting onshore trades with offshore hedges, forcing them to unwind positions and book losses. While the measure was intended as temporary, it remains in place despite criticism from industry players who view it as unnecessarily restrictive for legitimate hedging activities.