Hi,
Are banks prevented from holding dollar over and above certain limits?
are there any regualtions for this? like RBI Act, Banking Regulation Act of FEMA?
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Dollar liquidity reserve for banks
Replies (1)
The Limit is not fixed.
Because It depends on the total borrowing & Lending of the Banks.
If the bank holds the Dollar above the limit, then It Must have to sell the same to the Central Bank with the Fine also on the same day, when the Banks Forex Limit Crosses.
The Limit is denominated in the Dollar. Not only Dollar But Every kind of the Forex is covered under the same limit.
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