The Reserve Bank of India (RBI) reiterated its policy for banks that they should cover unhedged foreign exchange exposure of all their clients including small and medium enterprises.
?For arriving at the aggregate unhedged foreign exchange exposure of clients, their exposure from all sources including foreign currency borrowings and external commercial borrowings should be taken into account,? said an RBI in a release.
Banks, which have large exposures to clients, should monitor and review on a monthly basis, through a suitable reporting system, the unhedged portion of the foreign currency exposures of those clients, whose total foreign currency exposure is relatively large, say about $25 million, or its equivalent. The review of unhedged exposure for SMEs should also be done on a monthly basis. In all other cases, banks are required to put in place a system to monitor and review such position on a quarterly basis, it said.
