For the broking industry, fears of liquidity drying up loom large

Brokers have blocked payouts to YES Bank accounts and disabled YES Bank in the payments gateway

Brokers that have been issued bank guarantees against fixed deposits (FDs) of YES Bank are likely to get into a liquidity maze, with bourses halving the collateral value of such guarantees.

Bank guarantees are typically used for leveraging and getting credit lines from exchanges for trading. 

A Rs 50-crore FD, for instance, could get a broker a Rs 100-crore bank guarantee on paying a small fee, and subsequently a Rs 100-crore credit line from the exchange.

The NSE and BSE issued notice on Friday, saying no fresh bank guarantees and FD receipts issued by YES Bank, or renewals of such