1 week ago
RBI’s Rohit Jain Urges Stronger Oversight, Not Fear, of Integration
Rohit Jain of the Reserve Bank of India said India should not be afraid of connecting its currency markets with the rest of the world.
He said stronger rules and careful supervision are needed to manage risks.
The RBI temporarily tightened rules after unusual trading positions appeared between Indian and offshore markets.
It limited banks’ open foreign-exchange positions to $100 million and stopped them from offering some rupee-linked products offshore.
Some restrictions were later relaxed after the rupee became more stable.
Jain also said banks should make currency services easier and fairer for small businesses and individuals.
He encouraged more trade using local currencies and greater use of technology.
He warned people about fraud and cheating by illegal online forex platforms.
RBI deputy governor Rohit Jain said India should strengthen oversight rather than fear global forex-market integration.
The RBI introduced a $100 million onshore net open-position cap and barred banks from offering rupee-linked offshore NDFs.
Some restrictions were partially withdrawn after the rupee stabilised, but the $100 million cap remains.
Jain urged banks to improve retail forex pricing, remittance processes, local-currency settlement, and digital technology.
He also called for greater public-sector bank participation and warned against illegal online forex platforms.
- Who
- RBI deputy governor Rohit Jain, the Reserve Bank of India, banks, and foreign-exchange market participants.
- What
- Jain urged stronger risk management and oversight as India’s forex markets integrate with global liquidity.
- Where
- Mumbai and India’s onshore and offshore foreign-exchange markets.
- When
- Jain made the remarks at the Foreign Exchange Dealers' Association of India's Annual Day on 14 August; the speech was released on Thursday. The RBI introduced the $100 million cap on 27 March and barred rupee-linked NDFs on 1 April.
- Why
- The RBI acted after identifying unhealthy arbitrage positions linking onshore deliverable and offshore non-deliverable forward markets amid pressure on the rupee.
Key facts
- Foreign-exchange reserves
- India’s reserves are around $691 billion.
- Domestic forex turnover
- Average daily spot and derivatives turnover is about $80 billion.
- Rupee derivatives
- Notional outstanding is around ₹130 trillion.
- Offshore NDF activity
- Offshore activity is about $7 billion per day.
- Onshore position cap
- The RBI’s $100 million net open-position cap remains in place.
- FX-Retail facility
- The platform has offered individuals and small businesses access to competitive interbank pricing since 2019, but usage remains modest.
- FEDAI status
- The Foreign Exchange Dealers' Association of India was established in 1958 and recognised as a self-regulatory organisation for authorised forex dealers in January 2026.
Quotes
Rohit Jain
Deputy governor of the Reserve Bank of India
“"Some of these measures have since been reversed. As the market integrates further with global liquidity, the lesson is not to fear integration but to further strengthen risk management, governance and oversight arrangements."”
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Sources
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