Sensex, Nifty Face Collateral Damage

The freeze imposed on YES Bank has led to stock markets reeling under massive margin pressure, according to experts.

- Palak Shah

On Friday morning, the NSE issued a notice that brokers who had placed FDs of YES Bank and other instruments as collateral for availing positions in the stock market, will have to bring in additional funds of up to 100 per cent.

“The existing benefits provided to members towards bank guarantees and FDs issued by YES Bank in favour of NSE shall be reduced by 50 per cent of collateral value provided beginning March 9 and remaining 50 per cent by March 11,” said the compliance officer of a large broking house.

This means brokers will have to put up 100 per cent fresh margin by March 11 to avail new position limits if they had earlier used YES Bank facility for the same, he added.