RBI Tightens Broker Funding Rules: 100% Collateral Mandatory from April 2026

• RBI mandates 100% collateral for bank loans to stockbrokers and capital market intermediaries, effective April 1, 2026.
• Loans must be secured by cash, government securities, approved securities, immovable property, or other accepted financial assets; partial guarantees are disallowed.
• Bank guarantees for exchanges/clearing houses require at least 50% collateral (25% cash); 40% haircut on equity shares as collateral.
• Banks are prohibited from funding brokers' proprietary trading activities, but market making and short-term debt security warehousing are allowed.
• All such loans will count towards banks' capital market exposure, subject to prudential limits, aiming for a more transparent and risk-controlled framework.