When trading using collateral margins from pledged holdings, you must maintain at least 50% of the total margin requirement in cash or cash-equivalent assets.
This complies with SEBI’s regulations and ensures risk management while trading with leverage.
For intraday equity and derivatives, interest is charged at 15% per annum on the portion of margin funded through non-cash collateral or pledged holdings that exceeds the 50% limit.
Margin requirement is determined by the highest margin utilisation during the day, based on exchange snapshots from the NSE F&O segment. This means your intraday peak margin usage is considered while calculating any shortfall or interest.
How is the 50:50 rule applied?
Under the 50:50 rule, for any given margin requirement:
- 50% must come from cash or cash-equivalent sources (like ledger balance or liquid mutual funds)
- The remaining 50% can be covered through approved pledged securities
Example:
- Total margin requirement: ₹1,00,000
- Minimum cash required (50%): ₹50,000
- If cash available: ₹30,000
- Shortfall: ₹20,000
You’ll be charged 15% annual interest on the ₹20,000 shortfall (approx. ₹8.22 per day).
Interest is calculated daily on the shortfall and debited weekly from your ledger until the cash balance meets the 50% requirement.
Tip:
Monitor your cash-to-collateral ratio regularly—especially if you’re pledging or unpledging holdings during the day.
Remember that interest is based on your highest intraday margin utilisation as per NSE’s snapshot data,
so maintaining adequate cash balance throughout the day helps avoid charges.
What if?
| Scenario | What you can do |
|---|
| I pledged stocks but still got charged interest | Check if at least 50% of your margin is held in cash or cash-equivalent assets. Pledged securities alone don’t satisfy SEBI’s 50:50 requirement. Interest applies on any shortfall based on your intraday peak margin. |
| I don’t have enough cash to meet the 50% rule | Add funds to your ledger to restore the 50% cash ratio. Until corrected, 15% annual interest is charged on the deficit portion daily and debited weekly. |
| I unpledged some holdings and then saw interest charged | Unpledging reduces your non-cash collateral. If this causes your cash-to-collateral ratio to fall below 50%, interest applies on the shortfall from that point onward. |
| How do I avoid recurring interest charges? | Keep at least 50% of your margin requirement in cash or cash-equivalents at all times. Use the “Margin Statement” to track your cash vs pledged ratio and stay compliant with SEBI’s 50:50 rule. |
Last updated: 31 Oct 2025
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