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What does 'Delayed payment charges' entry on the funds statement mean?

Delayed payment charges are levied for the following reasons:

  1. A negative balance in the Zerodha account: If the utilised funds cross the available balance in the Zerodha account, it will lead to a debit balance. Additionally, if charges are debited without sufficient balance, it could result in a debit balance. In such instances, interest at 0.05% per day or 18% per annum will be levied on the debit balance.
  2. Over-utilisation of non-cash equivalent collateral margin: Exchanges stipulate that for F&O positions, 50% of the margin needs to compulsorily come in cash or cash equivalent collateral, and the remaining 50% can be in terms of non-cash collateral margin. The list of approved instruments that can be pledged for margins and the applicable haircut % can be found in this list (DOC). If sufficient cash margin is not maintained and the shortfall is funded by Zerodha, there will be a delayed payment charge of 0.035% per day or 12.775% per annum on the shortfall in the cash margin requirement.

To avoid Delayed Payment Charges, maintain sufficient funds in the Zerodha account. Delayed payment charges are calculated on a daily basis and posted on the funds statement at the end of each month. The interest levied on the debit balance can also be checked on the interest statement on Console. To learn how to download an interest statement, see How to download an interest statement?

Did you know? Delayed payment charges are not levied when margins increase during the day due to factors such as volatility or market events. However, if margins increase because of a hedge break, which involves the expiry or exiting of one leg of a hedged position, delayed payment charges will be applicable if sufficient funds are not maintained.