India's Brokers Expand Margin Trading Amid RBI's New Funding Rules for Proprietary Traders

India's traditional brokers are expanding margin trading facilities (MTF), allowing investors to buy shares with partial upfront payment and broker-funded credit, with the MTF book growing 42.9% to ₹1.2 lakh crore by January 2026. Meanwhile, the Reserve Bank of India's new rules require proprietary traders to fully secure bank guarantees with cash and eligible securities, aiming to limit speculative bank lending. Market participants warn these norms may increase costs for domestic traders, potentially benefiting foreign proprietary traders with easier funding access.