Putting an end to speculation, RBI Governor Sanjay Malhotra confirmed on Monday that the central bank will not revise its stringent new rules on bank financing for proprietary traders and brokers. The statement, made at a New Delhi press conference post-board meeting, addresses growing industry unease.
The February guidelines escalate collateral thresholds for broker guarantees and prohibit banks from funding prop trades, with enforcement from April 1. These steps seek to reinforce safeguards in a high-stakes trading environment.
Last week’s brokerage share slump reflected fears of profitability squeezes and volume drops due to costlier funding. Brokers have escalated their appeal to SEBI via a detailed letter, advocating for policy moderation.
‘Finalized after wide-ranging inputs, these rules aren’t up for alteration,’ Malhotra stated unequivocally.
Elsewhere, RBI’s inflation targeting review recommendations are now with the government, eyeing a March wrap-up. The 4 percent goalpost, banded at 2-6 percent, remains a cornerstone, unaffected by recent CPI basket adjustments that dialed back food influence.
Malhotra’s comments project confidence in navigating fiscal challenges, prioritizing long-term stability over immediate sector pressures.