Neutral impactCorporate Action
'RBI’s foreign exchange restriction not capital controls': Governor Sanjay Malhotra
CNBC-TV18 1 hr ago·14 Oct 2026, 5:37 am
Reserve Bank of India Governor Sanjay Malhotra has clarified that the recently announced foreign exchange reserve ratio (FERR) is not a form of capital controls. This policy mandates that banks maintain a specific percentage of their deposits in foreign currency reserves to manage volatility. Malhotra emphasized that this measure is distinct from restrictions on capital account transactions, which would involve limits on foreign investment flows.
For investors, this distinction is important because it alleviates fears that the RBI is restricting the free flow of foreign capital. By focusing on liquidity management rather than investment restrictions, the central bank aims to stabilize the rupee without deterring foreign portfolio investors. This clarity helps maintain market confidence in India's open capital account policies.
Investors should watch for the RBI's upcoming monetary policy review to see if any further details are provided on how banks will comply with the new reserve requirements. Monitoring the rupee's movement against the dollar will also be key to understanding the policy's impact on the broader market.
Excerpt from CNBC-TV18
Published On Oct 13, 2026 | 20:45 IST Last Updated On Oct 14, 2026 | 11:12 IST Malhotra reiterated that capital account transactions have been excluded from the recently imposed foreign exchange reserve ratio (FERR) requirements. Reserve Bank of India (RBI) Governor Sanjay Malhotra has said the central bank’s recent…Read the original at CNBC-TV18
Key takeaways
- Category: Corporate Action.
- Assessed as a significant, market-relevant update.
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A meaningful update worth tracking. Use the price and stock snapshot to gauge how the market is responding.
