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Don't expect impact on volumes due to new margin norms; real effect will be seen from Sep 2021: Zerodha

Updated : December 01, 2020 10:25 AM IST

The concept of peak margin will come into force in a phased manner from today. The new norms are aimed at preventing brokerages from giving additional leverage to investors.

From December 1, the maximum intra-day leverage that could be offered by a broker will be restricted with it reducing further until September 1, 2021.

“The real kicker in terms of more leverage stalled will be from September 2021,” said Nithin Kamath, Founder & CEO of Zerodha, in an interview to CNBC-TV18.

“However, starting today, what is going to change is there is a cap on maximum leverage that can be offered by brokerage. So the impact as such today may not be as much, but over the next 9 months the maximum leverages that can be offered at brokerages will keep reducing and traders will get used to that by then,” said Kamath.

According to him, large brokers like Zerodha won't see an impact as it’s already holding margin. “Brokers at the tail-end would be impacted more,” he said.

“Customers getting only 80 percent credit same day on selling stock will have a deeper impact,” said Kamath.

For the entire interview, watch video
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