Market intermediaries are likely to face a liquidity squeeze in the near term after the Reserve Bank of India’s (RBI) tighter lending norms come into effect from July 1. Industry estimates suggest the measures could impact market liquidity by Rs 50,000-Rs 60,000 crore and significantly raise the impact cost for foreign portfolio investors (FPIs) and mutual funds. Consequently, leverage among market intermediaries will get curtailed and make liquidity provision more capital intensive. According to Ketan Marwadi, member of the Commodity & Capital Market Participants Association of India (CPAI), around Rs 50,000 crore of liquidity could be affected once the new norms are implemented. He said clearing corporations have around Rs 11 lakh crore in collateral, including nearly Rs 1.2 lakh crore through bank guarantees and around Rs 1 lakh crore through intra-day facilities.