BANKING AFFAIRS

Detailed explanation-1: -Reserve Bank of India (RBI) has raised exposure limit under exchange traded currency derivatives (ETCD) trading for residents and foreign portfolio investors (FPIs) to $100 million across all currency pairs involving Indian rupee.

Detailed explanation-2: -Anticipated exposure-An exposure to the exchange rate of Rupee against a foreign currency on account of current and capital account transactions permissible under FEMA, 1999 or any rules or regulations made thereunder, which are expected to be entered into in future.

Detailed explanation-3: -Forward contracts booked in excess of 25 per cent of the eligible limit shall be on a deliverable basis and cannot be cancelled. The aggregate forward contracts booked during the year and outstanding at any point of time should not exceed the eligible limit.

Detailed explanation-4: -Position Limits for Foreign Portfolio Investor Gross open position across all contracts shall not exceed 15% of the total open interest or USD 100 million, whichever is higher. Gross open position across all contracts shall not exceed 6% of the total open interest or USD 10 million, whichever is higher.

Detailed explanation-5: -AGL may be fixed by the boards of the respective banks and communicated to the Reserve Bank immediately. However, such limits should not exceed 6 times the total capital (Tier I and Tier II capital) of the bank.