The Reserve Bank of India (RBI), on June 23, 2026, issued final Amendment Directions on “Net Open Position (NOP) – Revised Instructions” following public consultation on draft directions released on January 14, 2026. The amendments revise the prudential framework governing the computation of foreign exchange exposure and associated capital requirements for regulated entities.
The revised framework introduces several key changes, including the elimination of separate offshore and onshore NOP calculations, inclusion of the accumulated surplus of overseas operations in NOP computation where applicable, maintenance of foreign exchange risk capital charge based on actual NOP, and alignment of the Shorthand Method for NOP calculation with Basel Committee on Banking Supervision (BCBS) standards by treating gold positions separately. The directions also provide for the exemption of certain structural foreign exchange positions from NOP calculations.
The amendments have been incorporated across prudential capital adequacy directions applicable to commercial banks, small finance banks, local area banks, regional rural banks, urban and rural cooperative banks, all-India financial institutions, and standalone primary dealers. The objective is to ensure greater consistency in implementation and alignment with international prudential standards. The revised instructions will come into effect from April 1, 2027.
[Press Release: 2026-2027/529]
