In light of recent currency volatility and stricter regulations, banks in Mumbai are adopting a more cautious approach by demanding documentation from corporates involved in dollar transactions in the forward market. This shift aims to protect banks from potential violations of the Foreign Exchange Management Act (FEMA) amid a dollar shortage. Although the Reserve Bank of India (RBI) has not explicitly required banks to collect such documents, they are proactively verifying clients' import and export orders before allowing forward contracts. Banks are also setting limits on how much currency a company can book based on its historical performance. This comes after the RBI raised the forward booking limit from $1 million to $100 million between 2016 and 2020, allowing companies to engage in larger transactions without immediate documentation. However, concerns remain about the potential for misuse of these rules, as exporters could book multiple forward contracts with different banks using the same documentation. Furthermore, ambiguity persists regarding how banks should handle clients who wish to cancel existing contracts without prior documentation and then book new ones. Overall, banks are taking these precautions to safeguard against speculative practices and ensure compliance with regulations.