Overview
- The RBI’s February 13 circular bars banks from financing capital market intermediaries’ own trades, with limited exceptions for market making, and it takes effect on April 1, 2026.
- All credit to brokers must now be fully collateralised, margin trading facilities require at least 50% cash collateral, and equity used as collateral will carry a minimum 40% haircut.
- Banks must continuously value collateral and enforce margin calls, and their total capital‑market exposure is capped at about 40% of Tier‑1 capital with direct exposure at 20%.
- Shares of BSE fell up to about 10% on February 16, with Angel One, Groww and MCX also dropping as investors priced in higher funding costs and potential pressure on trading volumes.
- Jefferies projects roughly a 10% earnings hit for BSE, JM Financial says brokers like Angel One must rework MTF funding and Groww may tap markets, and Zerodha’s Nithin Kamath says earlier bank‑guarantee workarounds for prop desks are closed and Professional Clearing Members will face stiffer collateral terms.