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I’ve pledged shares and received collateral margin, but funds statement reflect a debit balance. Does the debit balance attract any delayed charges?

The funds statement won't include collateral margins as the collateral margin provided is not added or removed from the balance in your trading account.

Since the Collateral margin is not included in the funds statement, there are instances where your ledger will show the debit balance when you’ve utilised collateral margin for taking a position.

Here is a quick example-

Position - Long Nifty Futures

Margin required - Rs.1,50,000/-

You have:

Opening Balance on Kite: Rs. 70,000/-

Collateral from Liquid funds: 45,000/- (Cash Equivalent)

Collateral from equities: 60,000/-

As per regulations, 50% of the margins blocked for overnight derivative positions has to come in the form of cash or cash equivalent. The other 50% of the margin requirement can come from other non-cash equivalent collateral margins (margins received by pledging liquid funds are considered cash equivalent).

Fund utilization is as below -

Component Available for use (INR) Utilized (INR) Balance (INR)
Opening Balance(Cash) 70,000 45,000 25,000
Cash Equivalent 45,000 45,000 0
Collateral margin 60,000 60,000 0
Total Margin Collected

The withdrawable balance is -

Opening balance - utilized amount

70,000 - 45,000


Since the collateral margin is not included in the funds, the funds statement will show

Margin required for position - Cash available i.e. the opening balance

=1,50,000 - 70,000

= (80,000)

Please note, delayed payment charges won’t be charged on this debit balance of 80,000.