End Of Cheap Leverage: Zerodha's Nithin Kamath Flags Rising Trading Costs As RBI Mandates 100% Collateral

Nithin Kamath, co-founder of Zerodha, has raised concerns regarding the increasing trading costs for brokerages in India, particularly following the Reserve Bank of India's (RBI) recent directive mandating 100% collateral for all trades. This new regulation is expected to significantly impact the operational expenses of brokerage firms and could potentially lead to higher costs for retail investors. Kamath noted that while brokerages are grappling with rising costs, it remains unclear if these expenses will ultimately be transferred to customers. The move by the RBI aims to enhance financial stability, but it may also alter the trading landscape, making it more expensive for individual traders to participate in the market. As the situation unfolds, stakeholders in the financial sector are closely monitoring how these changes will affect trading dynamics and investor behavior in the long run.