Indian banks fall after RBI's fresh curbs on forex positions

ICICI Bank

02/04/2026 05:15

** Indian banks .NSEBANK fall 2.6%; benchmark Nifty 50 index .NSEI drops 1.9%

** Late on Wednesday, RBI barred banks from offering rupee non-deliverable forwards to resident, non-resident clients

** Curbs on corporate activity make it costlier for lenders to cut arbitrage positions, potentially saddling them with larger losses

** On Monday, banks had relied on corporate arbitrage flows to help reduce exposures in line with RBI's earlier directive

** Jefferies says this can lead to higher rupee appreciation, loss for banks at ~40 bln rupee ($428.7 mln)-50 bln rupees vs earlier estimate of 30 bln-40 bln rupees

** AU Small Finance Bank AUFI.NS falls most, losing 4.4%

** Largest lenders SBI SBI.NS, HDFC Bank HDBK.NS, ICICI Bank ICBK.NS down ~3%, 1.7% and 1.5%, respectively

** YTD, NSEBANK down ~16%, NSEI down 14.85%

($1 = 93.3030 Indian rupees)

 (Reporting by Urvi Dugar in Bengaluru)

 ((UrviManoj.Dugar@thomsonreuters.com;))