It is necessary that banks enhance the necessary skill-sets in this product which has been catching the attention of the end-users. While this will give a fillip to market development, the end-users’ hedging needs will also be met in a more competitive environment. Liberalization of net open position limits (NOPL) of banks Another important area is the net open position limits (NOPL) of banks.
Large open forex positions have systemic risk implications and need to be monitored closely. However, relaxation in these limits is essential to deepen the currency market as excessive restriction on speculation hinders the development of the market. Thus, a fine balance has to be maintained between the need to minimize risk and deepen the forex market in India.