The concept of broker funding a customer for intraday equity or F&O will exist no more. When I say no more, it will exist until Aug 2021 until when brokers are allowed to give some additional leverage. But this additional leverage is going to slowly reduce from Dec 1st 2020 until Aug 2021.
The only funding that a broker is now allowed is - MTF or allowing customers to buy for equity delivery with only VAR+ELM, but funding the rest from their own funds. In this case, the broker can charge interest on the money being lent.
Coming to the deposit requirement for sub-brokers or APs- Margin/deposit collected from sub-broker can’t be used to fund a customer’s intraday trades. So that will have to stop going forward. But I think many brokers collect a deposit to also safeguard in terms of risk - that is if an AP/Sub-broker client goes into debit balance, this is recovered from the AP/Subbroker.