Though the objective of the policy is prudential in nature as it protects the market participant against the credit, reputation and legal risks, it is important to realize that the policy protects the interest of the corporates as well.
Let me also reiterate that banks need to closely monitor the un-hedged foreign currency exposures of corporates as they had hedged approximately only 60 per cent and 38 per cent of their trade and non-trade related exposures respectively till December 2011.