RBI investigating the derivative accounts of banks – RBI Investigating The derivative Accounts of Banks

Banking Regulatory Reserve Bank of India (RBI) is investigating derivative investment of some private and public sector banks. This is being done after the IndusInd Bank disclosed the lapse in its derivative accounts. Sources said that the RBI has sought detailed information about the hedging positions of foreign currency in addition to its foreign borrowings and deposits.

On Monday, the private sector IndusInd bank reported a 2.35 per cent injury on the net worth due to a low estimate of the hedging cost of forex transactions. A source said, RBI wants to confirm from banks whether the hedging has been done effectively and the matter of IndusInd Bank is not part of any major problem. The email sent to RBI was not received for information about this.

From 1 April 2024, the asset liability management and the Treasury Desk of the banks were allowed to enter the internal swap before the new investment criteria for banks came into force where one cash flow is exchanged from another.

IndusInd Bank CEO Sumant Kathpalia said on Tuesday that the benefits caused by prematurely ending such deals were included, but the loss was not included.

First Published – March 12, 2025 | 10:52 pm IST