No systemic hit on account of derivative exposures: RBI

Mumbai, Apr 29 (UNI) There is no systemic hit in the financial market in India on account of off balance sheet exposures in foreign currency derivative by some banks in the country, RBI Governor Y Gopala Reddy said today.

Addressing a post-policy announcement press conference, Dr Reddy, however, declined to quantify the Mark to market losses due to the exposures and said the RBI had spoken to the banks involved in these exposures and were satisfied that the exposure would not hit the capital adequacy of these banks. The inspection of these banks in this regard was on, he added.

Commenting on the crisis in the financial markets globally, he said in most of the advanced countries there was a significant pressure on institutions to minimise the capital and play on the depositors money.

Dr Reddy said only a few banks were involved in the exposures in the country. The central bank had in its annual policy statement sought the banks to review current stipulations regarding conversion actors, risk weights and provisioning requirements for specific off balances sheet exposures of banks and prescribe prudential requirements as appropriate and the guidelines for the same would be releasaed by it by May 15, in view of the recent developments in global financial markets. It said the measures taken by it included additional risk weights and provisioning requirements for exposures to specific sectors.

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