India central bank lending restrictions could drive trading firms offshore

The Reserve Bank of India announced proposed rule changes on February 23, 2026, that would prohibit banks from lending for proprietary trading and require 100% collateral for other forms of funding provided to brokers. These measures, which are scheduled to take effect from April 1, are projected by market participants to materially reduce the margins available to proprietary traders and lower derivative trading volumes. The proposal has prompted concerns that some firms may choose to relocate or exit the market entirely as the regulatory environment shifts in India IN.