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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 the non-cash collateral, 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 computed on a daily basis and posted on the funds statement at the end of each month.