Among losers, AU Small Finance Bank fell 4.50%, IndusInd Bank declined 4.28%, Union Bank of India dropped 4.05%, and Yes Bank slipped 3.97%. Canara Bank, Bank of Baroda and Axis Bank also fell between 3% and 3.7%, while IDFC First Bank, Punjab National Bank and State Bank of India declined over 3%. Federal Bank, Kotak Mahindra Bank, HDFC Bank and ICICI Bank also ended lower, falling up to 2.6%.

The Reserve Bank of India, in an official communication dated 27 March 2026, directed authorised dealers to maintain their Net Open Position in Rupee within a limit of $100 million at the end of each business day. The directive applies to positions in the onshore deliverable foreign exchange market and will come into effect by 10 April 2026.

Net Open Position in Rupee refers to the net exposure of banks to movements in the domestic currency. By capping these positions, the central bank aims to restrict excessive build-up of currency exposure, reduce risks arising from exchange rate volatility, and ensure orderly conditions in the foreign exchange market.

Market participants fear that the move could force banks to unwind large arbitrage positions built between onshore and offshore markets, raising the risk of mark-to-market losses. The banking sector could reportedly face a potential hit of up to Rs 4,000 crore if currency gaps widen during the unwinding process, with the impact likely to be reflected in fourth-quarter earnings.

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