RBI's new capital market guidelines set to reshape broker funding strategies. Banks now require 100% collateral for lending, with at least 50% in cash, making traditional bank financing less attractive for equity brokers. This regulatory shift will likely drive brokerages toward bond and commercial paper markets to maintain liquidity. Analysts predict higher funding costs and compressed margins for market intermediaries, especially proprietary trading firms. The rules, effective April 2026, aim to reduce systemic risk by curbing leveraged trading in equity and commodity markets. Brokers will need to restructure their balance sheets and explore alternative funding sources. The changes may lead to lower speculative volumes and increased capital requirements across the financial sector. Market participants expect significant adjustments as intermediaries adapt to the new lending landscape.
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