UPSC Prelims Practice Questions — ‘Brokers’ body seeks 6-month freeze on RBI’s lending curbs’

Q1. Which of the following is the largest stockbrokers' body in India that, in February 2026, formally sought a six-month freeze on the Reserve Bank of India's new capital market lending norms?

  • A. Association of NSE Members of India (ANMI)
  • B. Association of Mutual Funds in India (AMFI)
  • C. Fixed Income Money Market and Derivatives Association of India (FIMMDA)
  • D. BSE Brokers' Forum

Q2. The new norms raising cash collateral for bank guarantees issued to stock exchanges to 100% and prohibiting bank lending for brokers' proprietary trading have been notified under which one of the following?

  • A. SEBI (Stock Brokers) Regulations, 1992
  • B. Commercial Banks – Credit Facilities (Amendment) Directions, 2026
  • C. Securities Contracts (Regulation) Rules, 1957
  • D. RBI Master Direction on Margining for Non-Centrally Cleared OTC Derivatives, 2024

Q3. Under the Reserve Bank of India's 2026 amendment directions, what is the minimum proportion of cash/Fixed Deposit collateral that a bank must hold against a bank guarantee issued to a stock exchange on behalf of a capital market intermediary?

  • A. 25%
  • B. 50%
  • C. 75%
  • D. 100%

Q4. In the context of the Reserve Bank of India's 2026 lending directions for capital market intermediaries, the term 'proprietary trading' by a stockbroker most accurately refers to which one of the following?

  • A. Trading in securities undertaken by the broker on its own account and at its own risk, rather than on behalf of clients
  • B. Trading carried out exclusively in proprietary (i.e., unlisted private) securities not admitted to any stock exchange
  • C. Trading executed by the broker solely on behalf of the promoter group of a listed company
  • D. Trading restricted to those derivative contracts of which the broker itself is the original issuer or designated market-maker