Reserve Bank issues Frequently Asked Questions on the Foreign Exchange Risk Reserve

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Reserve Bank issues Frequently Asked Questions on the Foreign Exchange Risk Reserve

19 October 2026

The Reserve Bank of India has issued a set of Frequently Asked Questions to clarify the Foreign Exchange Risk Reserve requirements. Those requirements were introduced through A.P. (DIR Series) Circular No. 26 dated October 10, 2026 and A.P. (DIR Series) Circular No. 27 dated October 12, 2026. The Reserve Bank said the FAQs are available on its website. The press release carrying the announcement is dated October 15, 2026 and was signed by Chief General Manager Brij Raj.

Circulars that introduced FERR: A.P. (DIR Series) Circular No. 26 and No. 27

Why it matters for exams: A newly created reserve requirement in the foreign exchange market is likely banking-exam material.

UPSCBank

19 October 2026 Source: Reserve Bank of India

In plain words

FERR Foreign Exchange Risk Reserve — A reserve requirement for foreign exchange risk introduced by the Reserve Bank in October 2026.

A.P. (DIR Series) Authorised Person (Directions) Series circular — The series in which the Reserve Bank issues foreign exchange directions to authorised dealers.