Hard times: foreign banks in India turn selective, but still sense an opportunity

Chadha: Banks that have been active in the forex and derivatives market will have a fair share of stress in the mark-to- market portfolio. It is important to advise clients when to buy caps or unwind these positions. While it is an issue that has attracted serious attention over the last six months, I do believe that the amplitude of the risk will be significantly lower over the next 6-12 months if clients prudently use the market opportunities to risk manage downwards their mark-to-market position.

Sanyal: We are closely engaged with our clients and all the relevant stakeholders for all their wholesale banking needs. This strong standard applies in calm and volatile market conditions, such as the recent past. MTMs do not imply or constitute ‘losses’, as the question suggests. However, we remain resolute in our focus in engaging with our client constituents with respect to the MTM-related ‘issues’ that have been much featured in recent press.