An era of tighter financing
The Reserve Bank of India (RBI) via a circular dated 13 February effectively stopped funding to prop traders. The circular said that from 1 April, banks must provide bank guarantees to prop traders only against 100% collateral, of which half should be in cash margin and the rest in cash equivalents such as government bonds, sovereign gold bonds, and listed securities. Earlier, this number was 50%. This simply means, if any one has to give 100% collateral, he has the money to buy the asset completely.
