RBI Enforces Stricter Lending Norms for Brokers Amid Derivatives Market Concerns

The Reserve Bank of India (RBI) has implemented stricter lending norms for brokers and proprietary traders, including higher collateral requirements and a ban on bank loans for proprietary trading, effective April 1, 2026. These measures aim to curb excessive leverage in India's derivatives market, which reached a daily turnover of ₹5.2 trillion by 2025, amid concerns over retail losses and financial stability. While brokers warn of reduced liquidity and higher costs, the RBI governor confirmed no plans to revisit the rules. Concurrently, Finance Minister Nirmala Sitharaman condemned mis-selling of financial products by banks, emphasizing regulatory enforcement under the Bharatiya Nyaya Sanhita. Separately, RBI may resume dollar purchases to rebuild reserves if the rupee strengthens.