The action could prompt banks to trade debt actively as it will reduce the incentive of parking securities until maturity and force them to mark more securities to market on a daily basis, leading to potential gains or losses, he said.

RBI also doubled the limit for some importers hedging currency exposure to 100 per cent of their average turnover over the previous three years or the preceding year's import revenue, whichever is higher. The previous limit was at 50 per cent.

Further, the apex bank announced several steps related to trading in G-secs, including relaxing rules for short- selling, and said it would continue injecting funds via one- day term repos, or cash-for-loans transactions, to keep money markets less volatile.

RBI allowed banks to include government bonds held by them up to another 5 per cent of their NDTL (net demand and time liabilities) within the mandatory SLR requirement as level 1 quality liquid assets (HQLA) to facilitate their meeting the LCR requirement.

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