Following feedback from clearing corporations, there will now be three haircut slabs depending on the type and tenure of government securities.
The Indian government has approved capital infusions into 12 public sector banks amounting to $6.8bn as part of its bank recapitalisation plan.
India’s central bank will pay a $3.9bn interim dividend to the government amid pressures to transfer its surplus reserves.
The draft directions under consultation include requirements related to administrators' minimum net worth, governance arrangements, and organisational structure, among other requirements.
The 20% cap limiting exposures to a single corporate entity was aimed at incentivising FPIs to maintain a portfolio of assets, but market feedback indicates it has instead had a contraining effect.
The latest penalties involve banks' non-compliance with RBI directions on the monitoring of borrowers' end use of loan funds, as well as failures related to KYC/AML compliance.
Among the measures proposed is a circuit breaker capping maximum daily movements at 20 percent for all stocks, including those on which derivatives trading is available.
The RBI wants banks to operate as subsidiaries of financial holding companies, with other business arms also split off into separate subsidiaries.
Equities derivatives with heightened volatility will see an earlier than expected move to mandatory physical settlement, SEBI's latest effort to reduce speculation and volatility.
Former central bank governor YV Reddy says there is no doubt the government has a claim over the RBI's reserves, but questions how it is exercising its claim.