Index derivatives turnover falls as RBI tightens bank funding to prop traders
Players fear further decline in volumes as funding curbs take effect; FPIs and deep-pocketed players may gain market share
In July, the turnover in NSE's index futures and options segment declined significantly, following tighter funding norms imposed by the Reserve Bank of India (RBI) for capital market intermediaries. Market participants expect the full impact of the revised framework to unfold gradually as existing bank funding is renewed under the new norms.
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