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Corporation Bank’s forex derivatives exposure Rs180 cr

Corporation Bank’s forex derivatives exposure Rs180 cr
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First Published: Mon, Apr 28 2008. 12 07 PM IST
Updated: Mon, Apr 28 2008. 12 07 PM IST
PTI
New Delhi: The public sector Corporation Bank has said it has an exposure of around Rs180 crore in the forex derivatives market, but is not expecting any hit on its balance sheet as the corporates, on whose behalf it entered into the contract, will bear the burden.
“The notional amount of the exposure in the derivatives market is Rs180 crore. Mark-to-market (losses) is around Rs20 crore, which is the customers’ burden,” chairman and managing director B Sambamurthy said here.
The bank has entered into forex derivatives market on behalf of two large corporates clients who already have exposure in the market, he said.
There is no possibility of court cases by the clients who are large business houses, he said, adding “we are going slow on these exotic instruments and have not entered into any such contract since September 2006”.
The bank, however, would continue to deal in “plain vanilla forward contracts” in forex, said Sambamurthy.
“Complex derivative is not a business we would like to take that’s why we have have come out of it”, he added.
Many other nationalised and private sector banks including SBI and ICICI, have reported losses on account of forex derivative trade. In certain cases, the companies have filed court cases refusing to bear the losses.
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First Published: Mon, Apr 28 2008. 12 07 PM IST