RBI to introduce extra provisioning for unhedged foreign exposure

The Reserve Bank of India (RBI) on Tuesday said it would introduce incremental provisioning and capital requirements for bank exposures to corporates with unhedged foreign currency exposures.

"The extent of unhedged foreign currency exposures of the corporate continues to be significant and increases the probability of default in an environment of high currency volatility," RBI said in a draft guideline on capital and provisioning requirements for exposures to corporates.

Banks can offer feedback on the various proposals in the guideline latest by August 2, 2013, the central bank said.

Copyright: Thomson Reuters 2013