Margin Collection Query

I was going through the recent Sebi consultation paper to allow netting for FPIs. In that it was mentioend that :

" In the current system, no margins are collected from the brokers or the custodians in case of FPI trades in cash market. "

Isn’t 20% upfront margin mandatory as per Sebi 2019/2020 Peak margin circular?

How do these Institutions ( FPI, MF… ) operate in cash market?