@nithin tweeted the following insights on this topic, along with a detailed substack post:
We’ve been trying to understand RBI’s new lending rules for brokers. Spoke to a few industry folks to figure out what’s actually changing. TL;DR: quite a bit. Here’s my understanding—things are still evolving
Firstly, nothing changes for any of our customers. We have 0 external financing, and are a self-clearing member, so our charges for clients will also remain unaffected.
The big change: Banks can no longer fund proprietary trading. This was never actually allowed, but banks had found workarounds. Here’s how it worked—prop desks would deposit an FD of Rs 50 crore, get a bank guarantee for Rs 100 crore, and place it with the clearing corporation for margins to trade with 2x leverage. That’s now completely shut down.
Another change: Professional Clearing Members (PCMs) enjoyed lower collateral requirements—they only needed 25% collateral to get a Rs 100 bank guarantee, while other intermediaries had to put up 50%. That preferential treatment is now gone. PCMs also need 50% collateral going forward. This likely means higher costs for brokers who rely on PCMs for clearing. Doesn’t impact us at Zerodha since we self-clear across all segments.
Costs are rising across the board for brokerages, and this may or may not get passed to you, the customer.
Now, because of this circular, intraday funding will get more expensive with the new 100% collateral requirement (up from 50%). MTF financing will also likely cost more since banks now need 100% collateral with at least 50% as cash or cash equivalents. All of this kicks in from April 1, 2026.