The Reserve Bank of India (RBI) has withdrawn its April 1 circular that prohibited banks and authorized forex dealers from offering non-deliverable forward (NDF) contracts to clients. This reversal allows banks to rebook any foreign exchange derivative contracts that were cancelled after April 1, providing them with more operational flexibility. The RBI's earlier restrictions were aimed at controlling banks' net open rupee positions, which were limited to $100 million as of March 27. Forex analysts noted that this clarification gives banks some breathing space, allowing them to offer NDF contracts within the specified limits. However, they cautioned that while this move restores some normalcy in the market, trading volumes remain thin as banks are hesitant to take positions amid frequent regulatory changes. Anindya Banerjee, head of commodity research at Kotak Securities, remarked that while the clarifications are important for bank operations, they are unlikely to have a significant impact on the dollar-rupee exchange rate.