Current · Source: Reserve Bank of India · RBI/2011-12/386 · issued 06 Feb 2012 · ~2 min read
Quick answerRBI has updated the monthly short selling report for government securities to reflect changes in regulatory limits due to shifts in outstanding amounts or benchmark status. Banks and primary dealers must submit the revised report by the 8th of each month.
The rule, in the simplest words
Banks and primary dealers must send a short‑selling report to the Financial Markets Department by the 8th of every month, in both soft copy and a certified hard copy.
The report must now record any changes in the regulatory limits that happen during the month, such as when the total amount of government securities changes or when a security’s liquidity status changes.
The limits are 0.25% of the outstanding amount for illiquid securities and 0.50% for liquid ones, as defined by FIMMDA.
Banks must keep their short positions below these limits and have the report certified by an auditor.
How it plays out — a real example
A treasury officer at a bank in Mumbai checks the latest outstanding figures for a 10‑year government bond. She updates the short‑selling template to show the new 0.50% limit, submits the soft copy online, and sends a certified hard copy to the Financial Markets Department before the 8th. This keeps the bank compliant and avoids any regulatory scrutiny.
What changed
The monthly report on short selling in government securities has been modified to capture changes in regulatory limits during the month, such as those from changes in outstanding stock or benchmark status. The revised format is provided as an annex to the circular. Submission of both soft copy and duly certified hard copy must now be made to the Financial Markets Department by the 8th of every month.
What it means for you
Banks and primary dealers need to update their internal reporting systems to track and report regulatory limit changes dynamically. This ensures compliance with short selling limits—0.25% of outstanding for illiquid securities and 0.50% for liquid ones, as classified by FIMMDA. Late or incorrect submissions could invite scrutiny.
What you must do
Update your monthly short selling report template to include fields for regulatory limit changes during the month.
Ensure the report is submitted in both soft copy and certified hard copy to the Financial Markets Department by the 8th of each month.
Verify that your short positions never exceed the regulatory limits (0.25% for illiquid, 0.50% for liquid G-Secs) and that the report is certified by a concurrent or internal auditor.
Who it affects
Banks trading in government securities, Primary dealers, Compliance and treasury departments
❓ Common questions
What is the new deadline for submitting the short selling report?
The report must be submitted by the 8th of every month, in both soft copy and certified hard copy, to the Financial Markets Department.
What are the regulatory limits for short selling in G-Secs?
Short positions cannot exceed 0.25% of the outstanding stock for illiquid securities and 0.50% for liquid securities, as classified by FIMMDA.
Does this circular change any other terms from the previous circular?
No, all other terms and conditions from the earlier circular dated December 28, 2011 remain unchanged.
📜 Read the original circular — full text as issued by RBI
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2011-12/386 · issued 06 Feb 2012. The plain-English explanation above is BankPulse’s own independent summary.
Example: if you are a Compliance officer at a bank this circular applies to (Banks trading in government securities, Primary dealers, Compliance and treasury departments), your first concrete step on “Revised Short Selling Reporting for G-Secs” is: “Update your monthly short selling report template to include fields for regulatory limit changes during the month.” (RBI issued this 06 Feb 2012).
Circular: RBI/2011-12/386 -- Revised Short Selling Reporting for G-Secs
Issued: 06 Feb 2012
Action required: Update your monthly short selling report template to include fields for regulatory limit changes during the month.
Action required: Ensure the report is submitted in both soft copy and certified hard copy to the Financial Markets Department by the 8th of each month.
Action required: Verify that your short positions never exceed the regulatory limits (0.25% for illiquid, 0.50% for liquid G-Secs) and that the report is certified by a concurrent or internal auditor.
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.
💬 Banker Discussion
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BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=6988&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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