RBI introduces major regulatory changes for capital market intermediaries, focusing on stability and risk management. Starting April 2026, bank loans to intermediaries will require full collateral backing. Key modifications include: 50% margin trading exposure must be cash-backed, 100% collateral requirements for bank guarantees, and reduced equity collateral value from 80-90% to 60%. Brokers must maintain 25% of margin trading facility in cash, impacting short-term profitability but enhancing systemic risk controls. The regulations reflect India's conservative market approach, contrasting with the US's more speculative financial environment. These changes aim to promote long-term investing over short-term trading, signaling a strategic shift in India's capital market regulatory framework toward enhanced financial stability and controlled risk exposure.
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