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The RBI can think of the following steps

This will also fulfil the desired objective of RBI avoiding devolvement at auctions.

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RBI likely to retain accommodative stance
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22 Feb 2021 11:21 PM IST

Speaking to market players/Off market interventions: This will also fulfil the desired objective of RBI avoiding devolvement at auctions.

Stopping VRR rollover: VRR is not helping in overnight rates as can be seen in last week treps rate which was averaging 2.4 per cent.

Holding period: Time period for covering short sale may be reduced from 90 days to 30 days.

Margin Requirement: Short sellers may deposit collateral to the tune of 150 per cent of value of short security.

Limit reduction: Security level limit may be reduced to 1 per cent of outstanding stock (or Rs 300 crore) of each.

Allowing More players: Allowing more players such as mutual funds and insurance companies in the repo market.

Penalizing short sellers: RBI can also supply bonds in the repo market to the short sellers if it has the stock.

RBI VRR Market 
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