RBI hikes margin on shares to 50%

The Reserve Bank of India on Tuesday raised margins on all advances against shares, initial public offerings and issuance of guarantees to 50 per cent from 40 per cent.

The central bank advised banks to raise the minimum cash margins to 25 per cent from the current requirement of 20 per cent.

In May 2004, margins for advances against shares, financing of initial public offers and guarantees were reduced to 40 per cent from 50 per cent and the minimum cash margin from 25 per cent to 20 per cent, RBI said.