The Reserve Bank of India (RBI), through A.P. (DIR Series) Circular No. 16 dated June 23, 2026, has partially modified its earlier directions on the Net Overnight Open Position (NOP-INR) framework applicable to Authorised Dealer Category-I (AD Cat-I) banks. Under the revised norms, banks are permitted to exclude positions arising from hedged transactions relating to FCNR (B) deposits, External Commercial Borrowings (ECBs), and Overseas Foreign Currency Borrowings (OFCBs) while computing their net overnight open position. The relaxation applies only to transactions covered under the RBI’s swap facilities introduced on June 8, 2026, and banks must continue to comply with the requirements prescribed under A.P. (DIR Series) Circular No. 24 dated March 27, 2026, and the Master Direction on Risk Management and Inter-Bank Dealings. The amendment aims to facilitate effective implementation of RBI’s foreign currency swap facilities while ensuring prudent risk management. The directions have been issued under Sections 10(4), 11(1), and 11(2) of FEMA, 1999.
Reserve Bank of India
RBI/2026-27/153
A.P. (DIR Series) Circular No.16 | Dated: June 23, 2026
To,
All Authorised Dealer Category-I Banks
Madam/Sir,
Open positions of Authorised Dealer Category-I banks
Attention of Authorised Dealer Category (AD Cat)-I banks is invited to the A.P. (DIR Series) Circular No. 13 dated June 8, 2026 and the Master Direction – Risk Management and Inter-Bank Dealings dated July 05, 2016, as amended from time to time. Attention of AD Cat-I banks is also invited to circulars FMOD.MAOG.No.S-56/01.06.016/2026-27 dated June 8, 2026 on ‘Swap Facility for FCNR (B) Deposits’ and FMOD.MAOG.No.S-57/01.06.016/2026-27 dated June 8, 2026 on ‘Swap Facility for External Commercial Borrowings and Overseas Foreign Currency Borrowings’.
2. In partial modification of the A.P. (DIR Series) Circular No. 13 dated June 8, 2026 on ‘NOP-INR position of Authorised Dealer Category-I banks’, it has been decided that AD Cat-I banks shall exclude the positions arising out of hedged transactions related to FCNR (B) deposits, External Commercial Borrowings and Overseas Foreign Currency Borrowings raised in terms of the aforesaid circulars, while ensuring compliance with the provisions of the A.P. (DIR Series) Circular No. 24 dated March 27, 2026 and for computation of net overnight open position in terms of the aforesaid Master Direction.
3. The directions contained in this circular have been issued under Sections 10(4), 11(1) and 11(2) of the FEMA, 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law.
Yours faithfully,
(Dimple Bhandia)
Chief General Manager
