On Thursday, Indian bank stocks experienced a decline of up to 4% as the Reserve Bank of India (RBI) implemented stringent forex regulations, potentially leading to losses of ₹5,000 crore (approximately $600 million USD) for lenders. Key banks such as AU Small Finance Bank, Union Bank, Canara Bank, IndusInd Bank, and Punjab National Bank each fell by 4%, while State Bank of India dropped 3.5%. Major private lenders like Axis Bank, HDFC, ICICI, and Kotak Mahindra Bank also saw declines of 2-3%. The RBI's new measures, which include barring banks from offering rupee non-deliverable forwards and restricting the rebooking of cancelled forward contracts, are seen as the toughest forex curbs in over a decade. Analysts from Jefferies have revised loss estimates for banks to ₹4,000-5,000 crore, up from an earlier estimate of ₹3,000-4,000 crore. This adjustment follows the RBI's action to close loopholes that banks had previously used to mitigate losses. The market's dollar-rupee open position was around $40 billion, and a 1% shift in the spread between offshore and onshore forward premiums could lead to losses of approximately ₹4,000 crore for the banking sector. The estimated financial impact is expected to be unevenly distributed, with foreign banks anticipated to incur about 45% of the losses.