RBI's new rules for loans to stockbrokers shake up market
As of February 2026, the Reserve Bank of India (RBI) has mandated that banks must back every loan to stockbrokers and intermediaries with 100% eligible collateral.
The move is designed to make the financial system safer and reduce risky lending.
Banks now have to constantly monitor the value of collateral
Banks now have to constantly monitor the value of collateral.
If it drops below the loan amount, brokers will need to top it up or repay part of their loan—so no more coasting if asset prices fall.
Standard 'haircuts' introduced by the RBI
The RBI is also setting standard "haircuts" (reductions in asset value for loans): listed stocks get a 40% cut, while mutual funds, REITs, ETFs, and gold bonds get a 25% cut.
Bank guarantees now need at least 50% collateral—including at least 25% in cash—way up from previous norms where brokers could secure big guarantees with much less money down.
Brokerage stocks dropped by up to 5%
Banks can't fund brokers' own trading anymore—a rule meant to stop risky loopholes.
Exceptions are made for client margin trading and settlements.
After these changes were announced, brokerage stocks dropped by up to 5%, showing just how much this shakes things up.