Business4h ago
FCNR(B) deposits: Who bears the currency risk? | Explained
AI EXECUTIVE SUMMARY
The RBI swap protects banks from currency risk on the principal of FCNR(B) deposits, but banks still face risk from dollar interest payments if the rupee depreciates. Banks must manage the interest payment risk themselves, potentially exposing them to losses if the rupee weakens.
WHY IT MATTERS
It explains how banks handle currency risk for foreign currency deposits, affecting their financial stability.
The RBI swap shields banks from currency risk on the principal, while banks have to manage dollar interest payments themselves, leaving some exposed if the rupee weakens
This story was originally reported by The Hindu โ Business. As an automated real-time news aggregator, NewsToolBar provides multi-perspective indexing and AI summarization while directing full readership directly to primary publisher sources.
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