Shares of capital market-linked companies such as Nuvama Wealth Management and Angel One and AMC stocks are expected to remain in focus after the Reserve Bank of India (RBI) deferred the implementation of its amendment directions on capital market exposures to July 1, 2026.
The central bank, in a press release dated March 30, said the revised norms, which were earlier scheduled to come into effect from April 1, 2026, have now been pushed back by three months following representations from banks, capital market intermediaries (CMIs) and industry bodies. Stakeholders had flagged operational and interpretational challenges, prompting the RBI to review the framework and extend the timeline.
The amendment directions, originally issued on February 13, 2026, aim to introduce a more structured and principle-based framework governing banks’ exposure to capital markets. These include enabling banks to finance acquisitions by Indian corporates, rationalising lending limits to individuals against financial assets such as shares, REITs and InvITs, and tightening norms around lending to capital market intermediaries.
Alongside the deferment, the RBI has also introduced clarifications to the framework. In acquisition finance, the definition has been expanded to include mergers and amalgamations, while financing will be permitted only for acquiring control in non-financial target companies. Refinancing of acquisition finance will be allowed only after completion of the transaction and establishment of control, and must be used solely to retire existing acquisition debt. The framework also requires a corporate guarantee in cases where acquisition finance is extended to subsidiaries or special purpose vehicles.
For loans against financial assets, the RBI clarified that caps—₹1 crore per individual against eligible securities and ₹25 lakh per individual for IPO, FPO or ESOP subscriptions—will apply at the banking system level. In addition, bank funding to capital market intermediaries for proprietary trading will be allowed only against 100% collateral in the form of cash or cash equivalents, tightening leverage in the system.
The deferment comes after a sharp reaction in capital market-linked stocks when the draft norms were first introduced. Shares of brokerage and wealth management firms, including Angel One, Nuvama Wealth and other similar players, had declined by up to 10% amid concerns that stricter lending norms could impact margin funding, leverage availability and overall trading volumes.
The earlier sell-off reflected fears that tighter bank exposure rules could reduce liquidity flowing into the capital markets ecosystem, directly affecting business models of brokerages, asset managers and wealth platforms that benefit from retail trading activity and leveraged participation.
With the RBI now deferring the implementation and offering additional clarity, near-term pressure on these stocks could ease. However, the final framework, once implemented, is expected to have a structural impact on how banks fund capital market activities, which in turn could influence trading volumes, margin funding dynamics and overall market liquidity.
Market participants will continue to track further updates from the RBI, including any additional refinements to the framework, as the revised norms move closer to their new implementation date.
Disclaimer: This article is for informational purposes only and should not be construed as investment advice.