Varinder Bansal, founder of Omkara Capital, has called for immediate regulatory changes in India's financial markets, urging SEBI to ease stringent rules that he says have impacted liquidity and trading flexibility. In a post on X, Bansal outlined a series of steps that could be implemented without delay to improve market conditions.
"Apart from what Samir Arora sir highlighted, many steps can be taken immediately – like removal of VWAP buying rule for the mutual funds (tightened hands of the MF industry), expand the list of 'collaterals' acceptable as margin pledges for availing Margin Trading Facility – nearly 1,000 stocks were expelled due to tighter regime of margin trading, relaxing T2T & ESM segment rules which has created liquidity issues in many stocks," Bansal wrote on X.
He further emphasised the need for SEBI to take a more proactive approach, comparing it to the Reserve Bank of India’s recent regulatory decisions. "SEBI needs to relax exceedingly tight regulatory regulations & act more and quickly like RBI did under the new governor. Over to the new SEBI chairman now."
Bansal’s remarks come amid a broader market downturn and growing dissatisfaction among investors over capital gains tax and tightened trading rules. At the Business Standard Manthan Summit 2025, veteran investor Samir Arora had called India's capital gains tax the government’s "biggest mistake," blaming it for the ongoing foreign investor exodus.
Arora argued that the tax policy has led to a prolonged FII sell-off, with foreign investors offloading ₹1 trillion worth of Indian equities in the past two months alone. "Taxing them on their gains, especially when they have no tax set-off available in their home country and when they face forex-related risks, is a big mistake that the government is making," Arora said, calling for a complete rollback of the tax.
Markets in freefall as FIIs exit
Investor concerns were further exacerbated on Friday, as the stock market suffered a major crash, wiping out ₹9 lakh crore in market wealth. The Sensex plunged 1,414 points (1.9%) to 73,198, while the NSE Nifty fell 420 points (1.86%) to 22,124.
The sharp decline was fueled by global trade war fears and relentless FII outflows, as foreign investors pulled ₹556.56 crore from Indian equities on Thursday alone. Market capitalization of BSE-listed firms dropped to ₹3,84,01,411 crore ($4.39 trillion), with stocks tumbling for the eighth consecutive trading session.