RBI Signals No U Turn On Broker Funding Curbs As April 1 Deadline Nears

India’s central bank is sending a clear message to brokers and proprietary trading firms who were hoping the new funding restrictions might be softened. RBI Governor Sanjay Malhotra said the central bank is not looking to revisit the rules that tighten collateral requirements and restrict bank financing for proprietary trading, with the framework still set to take effect on April 1, 2026.

For anyone watching securities finance in Asia, this is not just a local policy headline. Funding availability is the oxygen of market making and arbitrage. When banks require more collateral and financing becomes less flexible, risk budgets shrink and some strategies simply stop being economical. That usually shows up first in thinner liquidity during stress pockets, then later in wider spreads and more cautious inventory behavior from intermediaries.