India's largest bank has reportedly been hit by new foreign exchange trading regulations with a $5 billion rupee short position.

According to informed sources, India's largest bank's short bet of about $5 billion in rupees has been hit by regulatory crackdown on potential speculators, accounting for about 20% of its total exposure. The sources said that due to forced closure of these trades, the State Bank of India is estimated to incur losses of about $3 billion. They stated that, considering the bank's total assets exceed $800 billion, this loss is considered manageable. They added that, as the State Bank of India and other banks exit these positions, the rupee is expected to strengthen.