Markets hoping for relief got a reality check from RBI Governor Sanjay Malhotra, who firmly ruled out any tweaks to the fresh curbs on bank loans for proprietary trading and brokers. The update, shared during a post-board meeting media briefing in New Delhi on Monday, aims to steady nerves after recent volatility.
Issued early this month, the directives tighten collateral for bank guarantees to brokers and ban prop trading loans from banks, kicking in April 1. Designed to mitigate systemic vulnerabilities, they’ve sparked debate in trading circles.
Brokerage stocks nosedived last week on worries that funding constraints could erode margins and trading turnover. Brokers fired off a letter to SEBI, pressing for a regulatory reassessment to safeguard industry growth.
Malhotra, however, stood his ground. ‘We’ve gone through thorough deliberations; no changes are on the table,’ he told reporters.
In parallel, the RBI has handed over its inflation framework proposals to the government, with the review slated for late March. The current mandate holds retail inflation at 4 percent (±2 percent), subject to periodic evaluations.
Addressing methodology shifts in CPI data—like trimming food weights—Malhotra clarified they pose no threat to RBI’s targeting approach. As the April implementation looms, the central bank’s resolve could reshape lending dynamics in India’s financial markets.