....RBI’s role is thus to ensure a non-volatile rupee, educate borrowers about risk management, wean them away from the ephemeral benefits of unhedged exposure and urge banks to use more caution. RBI in its mid year credit policy of October 2011 had warned banks about this corporate tendency to remain exposed. It urged banks to recognise the credit risk in lending to corporates who had unhedged foreign loans on their books. Unfortunately, if domestic lenders shy away, the foreign and offshore dollar lenders will show up on the doorstep of such borrowers.....
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