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