Indian banks seek RBI clarity on FERR 20% requirement

Business Oct 12, 2026

Indian banks are looking to the Reserve Bank of India (RBI) for clearer instructions on a new rule called the Foreign Exchange Risk Reserve (FERR).

This rule means banks now have to set aside 20% of the rupee value for any foreign exchange derivative contract involving Indian rupee (INR) over $2 million equivalent, a move meant to keep currency markets steady.

Banks await RBI guidance on charges

Banks are unsure how to handle the extra costs, especially for importers and exporters who use these services.

They are also waiting to hear if these charges should be standard for everyone.

On top of that, banks are juggling other recent RBI changes, like stricter transaction rules, making this a period of adjustment for everyone involved.