.................It is in this context that RBI said that it was up to commercial banks to ensure their clients were hedging their positions. SBI chairman Pratip Chaudhuri’s position that this is the central bank’s responsibility misses the point. While Chaudhuri says RBI should ask companies to put in place proper hedges when it sanctions foreign currency borrowings, it is the commercial banks who monitor the corporates on a daily basis and who are, therefore, in the best position to ensure the hedges are in place. In any case, if the companies don’t hedge their positions, it is the commercial bank loans that are in danger of going bad. Indeed, it is surprising that RBI needed to even make this statement and ask bankers not to give additional limits to firms if forex hedges were not place...............
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