RBI’s new rules send capital market stocks into a tailspin:BSE, Angel One and Groww fall by about 10%

On Monday, February 16, 2026, capital market stocks went into a tailspin. This was due to the Reserve Bank of India’s (RBI) new rules. These rules affect how such companies can borrow money and trade. What’s Proprietary Trading? One of the main things the RBI is trying to control is something called “proprietary trading,” or “prop trading.” This is when a company uses its own money to buy and sell stocks, bonds, and other things, hoping to make a profit. It’s different from when a company buys and sells things for its customers. The RBI thinks that too much prop trading can make the market risky. RBI Wants to Reduce Risky Trading The RBI is worried that some companies are taking too many risks when they trade. So, they’ve decided to make it harder for these companies to borrow money for trading. The goal is to make the stock market more stable and protect investors. The New Rules Explained Simply Here are the key things the RBI has changed: Collateral Required: If a stock market company wants to borrow money, it must now provide something valuable as security. This is called “collateral.” If the company can’t pay back the loan, the bank can take the collateral. No Loans for Trading: Banks are no longer allowed to give loans to these companies specifically for the purpose of trading or investing on their own account. These new rules will start on April 1. Why is the RBI Doing This? The RBI is concerned that prop trading firms are responsible for a large amount of trading in the Indian stock market. A recent report said that these firms were involved in more than half of all trading in certain types of stock options. The RBI worries that this could make the market more unstable if these firms take big risks. Impact on Stock Prices The news about the new rules caused the stock prices of some major stock market companies to fall: BSE Ltd: The price of BSE Ltd shares dropped by as much as 9.5%. Angel One: Angel One’s stock price went down by 6%. Groww’s Parent Company: The shares of Billionbrains Garage Ventures Limited, which owns Groww, fell by over 4%. More Rules to Come? These new rules come shortly after India increased taxes on certain types of stock trading. Some people in the market worry that all these changes together could make it harder to trade and reduce the overall amount of activity in the market. Banks Also Affected The RBI is also telling banks to be more careful about giving guarantees to stock market companies. If a bank guarantees a trade for one of these companies, the bank must make sure it has enough security to cover the guarantee. In short, the RBI is trying to make the Indian stock market safer by limiting the amount of risky trading that companies can do with borrowed money. This could have a significant impact on the market and the companies that operate within it.