Banks seek RBI nod to use new rules for old trade mismatches
Indian banks are seeking approval from the Reserve Bank of India to apply new regulations to resolve a backlog of nearly ₹1 lakh crore in old, unsettled trade transactions. New regulations, set to become effective on October 1, 2026, will empower banks to address these long-pending cases. The banking sector's objective is to prevent exporters from being placed on the caution list due to past unsettled trades. RBI Deputy Governor Rohit Jain is scheduled to meet with bank CEOs this week to discuss this and other regulatory matters.
What this means
Resolution of these old trade mismatches is crucial for cleaning up bank balance sheets and providing relief to exporters who might face operational restrictions. The RBI's engagement suggests a willingness to address long-standing issues, but banks will need to demonstrate diligent application of the new rules to avoid future accumulation of such discrepancies.
Most affected: Trade finance, Compliance departments, Corporate banking
Key takeaway: Banks should prepare for the implementation of new trade mismatch rules and ensure internal systems and processes are ready to efficiently resolve outstanding cases.
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