Fri Nov 07 08:50:00 UTC 2025: News Article:

Sitharaman Rejects F&O Trading Ban Despite Retail Investor Losses

Mumbai, India – Finance Minister Nirmala Sitharaman has affirmed that the government will not shut down futures and options (F&O) trading in India, despite concerns over significant losses experienced by retail investors. Speaking at a State Bank of India banking and economics conclave on Thursday, Sitharaman emphasized that while the government aims to remove roadblocks in the market, it is not its place to dictate investment choices.

“The government is not here to shut the door on futures and options trading,” Sitharaman stated. “The government is here to remove the roadblocks and work on them. It is investors’ responsibility to understand the associated risks.”

Her statement comes amid growing scrutiny of the F&O market, which boasts a staggering Rs 516 trillion in trading volume. Recent studies by the Securities and Exchange Board of India (SEBI) revealed that over 93% of retail investors participating in F&O trading are losing substantial amounts, averaging Rs 1.25 lakh per year per person.

SEBI has already implemented measures to curb excessive speculation in the market. Last month, SEBI chief Tuhin Kanta Pandey echoed Sitharaman’s sentiment, stating the regulator has no plans to abruptly shut down weekly F&O expiries, a feature used by many market participants. He acknowledged the concerns surrounding the derivatives market and the need to control “irrational exuberance” among less experienced investors.

In other remarks, Sitharaman highlighted the government’s ambition to create larger, world-class banks in India. She mentioned ongoing discussions with the Reserve Bank of India (RBI) and lenders regarding a potential second phase of public sector bank consolidation. She emphasized that even India’s largest bank, SBI, ranks only 53rd globally, and Indian banks’ market capitalization lags behind top international players.

Sitharaman also urged banks to increase lending to the industry, expressing confidence that demand driven by GST rate cuts would spur investment.

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