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SEBI has banned Mini Nifty contracts, with an intention to prevent Retail investors from being lured to Derivative trading.

Exchanges are directed to take necessary action to give effect to this circular. No fresh mini derivatives contracts shall be issued. However, the existing unexpired contracts may be permitted to trade till expiry and new strikes may also be introduced in the existing contract months. Further, Exchanges are also directed to give due notice to the market in this regard.
Meanwhile mini nifty will only be traded till 31st jan 2013
Trading in Mini Nifty (MINIFTY) is very low. Open Interest is as low as 2000 in the most active contracts.

There are 2 views to it. Some are saying, volumes are too low and banning Mini Nifty (MINIFTY) is actually not going to protect a huge segment of Retail Investors and that the move is useless.

On the other-side, Well, there's no volumes. So, whats the point in having Mini derivative contracts when no one's trading it. I think, not much volumes is more the reason for the ban, than protecting investors.