Drop targets with large rounded corners work as expected on my side - I can drop only inside the area, not on the area, which is just outside the rounded corners. In case the drop target is an element inside the <div> with the rounded corners, then try setting overflow:hidden to that <div>, so that the drop target does not overflow.
You can experiment with the following demo by increasing the border radius via the browser's DOM inspector:
If your case is too different and the above information is not relevant, please provide a runnable demo.
Join us on our journey to create the world's most complete HTML 5 UI Framework - download Kendo UI