The Reserve Bank of India (RBI) has proactively recalibrated its stance on bank funding to brokers, deferring stringent capital market exposure norms from April 1 to July 1, 2026. This shift reverses February's effective ban on bank financing for brokers' proprietary trading, now permitting it under strict safeguards, lending only against 100% cash or cash-equivalent collateral to mitigate risks.

The move balances market liquidity needs with enhanced bank risk controls, transitioning from a blanket 'no funding' policy to 'fully secured funding.' RBI also relaxed rules for market makers, lifting prior collateral restrictions to bolster trading efficiency.

This proactive recalibration reflects RBI's adaptive approach, ensuring financial stability amid volatile markets while supporting broker operations. Banks must now implement robust monitoring to prevent leverage excesses, signaling RBI's nuanced liquidity-risk equilibrium.