MUMBAI, Feb 23 (Reuters) – RBI is not planning to revisit recently announced rules for bank financing of proprietary traders and brokers, its governor said on Monday.
In rules released earlier this month, the Reserve Bank of India raised the collateral requirements for bank guarantees to brokers and barred lending for proprietary trading by them. The changes are due to take effect from April 1.
Shares of brokerage firms fell last week on concerns the rules would impact brokers’ profit margins and reduce trading volumes. Brokers have sought a review of the rules in a letter sent to the market regulator.
The rules were finalised after consultation, RBI Governor Sanjay Malhotra said at a press conference following the bank’s board meeting.
“There is no change that we are contemplating,” he said.
INFLATION TARGETING REVIEW
Malhotra said the central bank has sent in its recommendations on India’s inflation-targeting framework to the government ahead of an upcoming review.
He did not disclose the recommendations.
India mandates the central bank target retail inflation 4%, with a comfort band of 2%-6%. The target is up for review by the end of March.
India recently revamped its retail inflation data, lowering the share of food in the basket of goods used to measure prices.
The changes, by themselves, will not impact the central bank’s view on the appropriate inflation target, Malhotra said.
