MUMBAI: The RBI does not plan to revisit its recently announced norms on bank financing for proprietary traders and brokers, Governor Sanjay Malhotra said on Monday.
Earlier this month, the RBI tightened rules by increasing collateral requirements for bank guarantees issued to brokers and prohibiting banks from lending for proprietary trading. The measures will take effect from April 1. Shares of brokerage firms declined last week amid concerns that the changes could hurt profit margins and dampen trading volumes. Brokers have written to the market regulator seeking a review.
Speaking after the central bank’s board meeting, Malhotra said the rules were finalised after consultations and indicated no reconsideration was underway. “There is no change that we are contemplating,” he said.
On monetary policy, Malhotra said the RBI has submitted its recommendations to the government on the inflation-targeting framework, which mandates a 4 per cent retail inflation target within a 2 per cent-6 per cent band. Recent changes to the retail inflation basket, including a lower weight for food, would not alter the RBI’s view on the appropriate target, he added. Agencies