RBI's New Lending Rules to Reshape Broker Model, Says Zerodha's Nithin Kamath

• RBI's new lending norms will significantly alter how banks finance broker activities, according to Zerodha Co-founder Nithin Kamath.
• Bank-funded proprietary trading is effectively shut down, closing a common funding channel for brokers and prop desks.
• Professional Clearing Members (PCMs) now face tighter collateral norms, requiring 50% collateral for bank guarantees, up from 25%.
• Intraday and Margin Trading Facility (MTF) funding rules are tightened, requiring 100% collateral for intraday and 100% backing for MTF.
• These changes, effective April 1, 2026, are expected to raise funding costs for brokerages, with potential impact on customers.