Banking stocks came under sharp selling pressure on Monday, dragging the Bank NIFTY index down more than 2% in early trade. The decline follows the latest directive from the Reserve Bank of India (RBI), aimed at stabilising the weakening rupee against the US dollar.
| Stock Name | LTP | % Change |
| HDFC Bank | 744.30 | -1.57% |
| ICICI Bank | 1,218.20 | -1.26% |
| Axis Bank | 1,171.40 | -2.80% |
| SBI | 1,001.40 | -1.78% |
| Kotak Mahindra Bank | 353.55 | -3.44% |
| Federal Bank | 263.00 | -2.34% |
| IndusInd Bank | 767.90 | -3.11% |
Note: The information presents the trading prices of top constituents of Bank NIFTY as of 10:17 AM.
In a circular issued on March 27, the RBI instructed banks to cap their Net Open Position (NOP-INR) in the foreign exchange market at US$100 million by the end of each business day. Banks must comply with the directive no later than April 10, 2026.
The move is designed to limit excessive currency exposure and reduce speculative positioning. However, it has immediate implications for banks, which typically maintain larger open positions to manage liquidity and trading operations.
The new cap is expected to trigger significant unwinding of forex positions by banks. Traditionally, lenders balance their onshore positions with offshore exposure in the non-deliverable forwards (NDF) market.
With tighter limits now in place, banks will need to:
This adjustment could impact treasury income and trading profits in the near term, leading to negative sentiment in banking stocks.
The RBI’s intervention comes amid sustained weakness in the Indian currency. On Friday, the rupee hit a record low near 94.84 against the US dollar, intensifying concerns over external stability.
By forcing banks to cut forex exposure, the central bank aims to increase dollar supply in the market, thereby offering temporary support to the rupee.
Read more: Flipkart Brings Technology Together Under OneTech Initiative Ahead of Potential IPO.
The sharp drop in Bank NIFTY reflects market concerns over the RBI’s tightening measures and their impact on bank profitability. While the move may help stabilise the rupee in the short term, it introduces near-term uncertainty for banking stocks as institutions adjust to the new regulatory framework.
Disclaimer: This blog has been written exclusively for educational purposes. The securities or companies mentioned are only examples and not recommendations. This does not constitute a personal recommendation or investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Investments in the securities market are subject to market risks. Read all the related documents carefully before investing.
Published on: Mar 30, 2026, 10:24 AM IST
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