MTF risk grows as investors borrow record Rs 1.36 lakh crore to buy stocks. What happens if the market falls?

Margin Trading Facility (MTF) exposure on Indian exchanges hit a record Rs 1.36 lakh crore in June, up sharply from Rs 0.86 lakh crore a year earlier, with NSE accounting for over 96% of volumes. CareEdge warned that record leveraged exposure alongside a 6.7% sequential decline in cash market average daily turnover poses significant risk if markets correct, especially amid geopolitical tensions in West Asia. The RBI revised framework effective July is expected to increase working-capital requirements for brokers and influence market liquidity.