Following the stock exchanges reducing the trade settlement time from two days to one day, (T+1) and now in select equities T+0, the Reserve Bank reduced the maximum risk to the custodian banks issuing irrevocable payment commitments (IPCs) to 30% from the existing 50%.

The move is on the assumption of downward price movement of the equities bought by foreign institutional investors/mutual funds on the two successive days from the trade date.

The notification further said the risk mitigation measures prescribed in the December 2011 circular were based on T+2 rolling settlement for equities. But since stock exchanges have now introduced T+1 rolling settlement, the extant guidelines on IPC issuance have been reviewed.