Explained: How RBI’s safety net to protect falling rupee could mean Rs 4,000 crore shock for banks

The Reserve Bank of India has stepped in to halt the rupee’s fall. This move forces banks to unwind dollar positions, potentially leading to a Rs 4,000 crore loss for the banking sector. Banks had profited from differences in dollar rates between local and offshore markets. The RBI’s action aims to curb one-sided bets against the rupee.