RBI to extend finance to stockbrokers
Mumbai: Reserve Bank of India (RBI) has decided to continue the scheme of extending finance by banks to stockbrokers for margin trading until further notice.
The apex bank in a notification to all scheduled commercial banks, said the board of each bank should formulate detailed guidelines for extending finance to the stockbrokers within the overall ceiling of five per cent for exposure to capital market.
RBI said, the banks should formulate the guidelines subject to parameters like maintaining a minimum margin of 40 per cent on the funds lent for margin trading.

The shares purchased with margin trading should be in dematerialized mode, under pledge to the lending bank. The bank should put in place an appropriate system for monitoring and maintaining the margin of 40 per cent on a regular basis.
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