The Reserve Bank of India has asked banks to put in place a proper mechanism to rigorously evaluate the risks arising out of un-hedged foreign currency exposure of corporates. It wants the banks to price this exposure in the credit-risk premium.

“Banks are advised to furnish compliance/action-taken reports on the subject to us before end-December 2012 after obtaining the approval of their Board of Directors,” RBI said in a statement. The RBI observed that banks have not adhered to its guidelines on un-hedged foreign currency exposure yet.