Market Risk

held steady at the RBI MPC meeting, April 2026 (after cumulative cuts of 125 bps since Feb 2025); neutral stance retained. SDF: 5.00%; MSF & Bank Rate: 5.50%. Treasury desks revalue G-Sec / call-money positions to these benchmarks. (RBI MPC Resolution, April 2026.)

unchanged at the April 2026 MPC review, steady since December 2025. Both directly drive Treasury’s daily reserve-maintenance and SLR-investment desk activity. (RBI Database on Indian Economy, current as of May 2026.)

banks add an extra 2.5% run-off rate on retail / small-business deposits accessible via internet & mobile banking (down from a proposed 5%); haircuts on Level-1 G-Sec HQLA aligned with LAF/MSF margin requirements. Estimated aggregate LCR uplift: ~6 percentage points. Minimum LCR: 100%. (RBI…

applies to all commercial banks except Payments Banks, RRBs and Local Area Banks; updated guidelines effective April 1, 2026. Treasury’s funding desk monitors NSFR daily. (RBI Master Direction on NSFR.)

large positions are run on a small capital base; small adverse price moves can wipe out significant capital quickly.

the Treasurer commits to individual market deals without specific management approval for each trade; limits are pre-delegated, so a single error of judgment can produce enormous losses.

once confirmed, treasury transactions are irrevocable; losses crystallise in hours / days, leaving no time for corrective action.

the source of risk is the variation in market price (volatility of exchange rates / interest rates) of currency or security between the buy leg and sell leg of a transaction. The longer a position is held open, the larger the variability — hence the rule that traders are not allowed to hold open…