The Reserve Bank of India (RBI) has introduced stringent new lending norms for capital market intermediaries, triggering an immediate pushback from the country’s brokerage lobby. Leading industry bodies, including the Association of National Exchanges Members of India (ANMI), are urging the central bank to defer the implementation of these rules by at least six months. The new framework, originally scheduled to take effect on April 1, 2026, mandates that all bank credit facilities to stockbrokers and clearing members must be 100% secured. This is a significant departure from current practices where partial collateralization was common. Brokers argue that the sudden transition creates massive operational hurdles and liquidity constraints that could disrupt market stability. Key highlights of the new regulations include: Banks must now apply a minimum 40% haircut to listed shares used as collateral. For instance, shares worth 100 INR will only support a loan of 60 INR. This reduces the effective borrowing power of firms significantly. Bank Guarantees (BGs) issued to exchanges now require a minimum of 50% collateral, with at least 25% of that being in pure cash. This move locks up substantial working capital that brokers previously used for market operations. The RBI has explicitly prohibited banks from funding proprietary trading activities. While funding for market-making and margin trading remains permitted, firms that rely on their own books for high-frequency or algo-trading face a severe squeeze. Market data reflects the industry's anxiety. Following the announcement, shares of major listed brokerages like Angel One and the BSE itself saw corrections ranging from 5% to 7% as investors priced in higher funding costs and potential revenue hits. Analysts estimate that these tighter norms could lead to a 10% to 15% drop in overall trading volumes, particularly in the high-growth derivatives segment. The brokerage lobby emphasizes that while the goal of reducing systemic risk is valid, the current timeline is too aggressive. They contend that firms need more time to restructure their balance sheets and transition away from bank-dependent funding models to costlier alternatives like commercial paper or NBFC lines. Despite the short-term friction, the RBI maintains that these measures are essential to prevent a domino effect during sharp market corrections. By enforcing full collateralization and continuous daily monitoring of asset values, the regulator aims to protect the banking system from volatile swings in the equity markets. The outcome of the lobby's request for a six-month delay remains pending. For now, the industry is bracing for a period of consolidation where well-capitalized, diversified firms are expected to gain a competitive edge over smaller players who lack the liquidity to meet the new 100% security mandate.