Share Market Update: Stocks of BSE, Angel One and Grow crashed, know why there was panic?

Share Market Update: A huge fall was seen in the shares of capital market companies today on 16th February. Shares of many capital market companies including BSE Limited, Angel One Limited and Grow (Billionbrain Garage Ventures) fell up to 10%. This decline came after the Reserve Bank of India (RBI) issued a new regulation. RBI has made the regulations more stringent for banks regarding stock market exposure.

What are the new regulations?

RBI issues Commercial Bank Credit Facilities Amendment Directions, 2026. These new regulations will come into effect from April 1, 2026. Under these regulations, banks will now be able to give loans to stockbrokers and other intermediaries only on a fully secured basis. Mere partial guarantee or promoter guarantee will no longer suffice, as it used to be earlier. If banks issue bank guarantees in favor of an exchange or clearing house, they should be secured by at least 50% collateral. Of this, 25% should be in cash. If equity shares are taken as collateral, there will be a minimum 40% haircut in their value.

Ban on proprietary trading

RBI has also clarified that banks can no longer fund the proprietary trading of brokers. However, funding for market making and short-term warehousing of debt securities may continue. Loans to clients can continue under the Margin Trading Facility (MTF), but banks will need to include margin call clauses and continuously monitor the collateral. All these loans will now be counted towards the capital market exposure limit of banks. This may impact the overall funding available for the sector.

Why are investors worried?

Market experts believe that these regulations may increase the funding cost of brokers and make it difficult for them to take loans from banks. According to brokerage firm Citi, these regulations may slow down trading activity in some segments. However, it is too early to say what its full impact will be on the company’s profit.

JM Financial said this could reduce the availability of bank funding and increase trading costs for brokers. The brokerage said Angel One may have to rethink its funding strategy for its margin trading portfolio among listed companies. Grow’s MTF book is growing rapidly, due to which the company can raise funds from the capital market for expansion.