The National Stock Exchange has barred LIC and Bandhan Bank from the derivatives segment after their open interest surged past market limits, reflecting ongoing regulatory efforts to curb stock market volatility.
The National Stock Exchange barred Life Insurance Corporation of India and Bandhan Bank from the futures and options segment on Friday after both stocks crossed the exchange’s market-wide position limit, a threshold intended to curb excessive speculation in derivatives. Life Insurance Corporation remained on the restriction list from Thursday, while Bandhan Bank was added after its open interest rose sharply, according to EquityPandit’s market note.
The move fits a broader pattern on Indian exchanges, where F&O contracts are routinely withdrawn when activity becomes too concentrated. In 2020, Reuters-linked reporting from Moneycontrol, The Economic Times and Business Standard noted that the NSE and the Bombay Stock Exchange removed contracts in names including Century Textiles & Industries, Equitas Holdings and Ujjivan Financial Services after concerns over sharp single-day swings and in line with market regulator SEBI’s push to limit volatility.
For traders, the ban does not mean the shares cannot be traded at all. They remain available in the cash market, but fresh derivative bets are blocked until open interest falls back below the exchange’s threshold. The NSE updates its ban list each day, and index traders are not affected in the same way because the restriction applies to individual securities rather than benchmark contracts.
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