The Reserve Bank of India (RBI) is scrutinising the ‌methods large banks used to unwind their Rupee arbitrage positions, six sources said, ​on concerns the trades may have breached regulations and impeded efforts to ⁠stabilise the currency.

In late March and early April, the RBI effectively forced banks to unwind up to $40 billion in Rupee arbitrage trades between the onshore and non-deliverable forward markets as it sought ‌to shore up a currency that was teetering at record lows due to the Iran war and foreign fund outflows.