The exchange charges a margin penalty when your trading account does not have enough funds to cover the required margin. You must maintain sufficient margins in your account for your trades and transfer additional funds if there is a margin shortfall (when there are insufficient funds or margin in your account). The margin penalty is a fee charged when a trading account does not have enough funds to cover the required margin.
Penalty calculation
The exchange levies the penalty based on your shortfall amount:
| Shortfall collection for each client | Penalty percentage of the shortfall |
| (< ₹1 lakh) And (< 10% of applicable margin) | 0.5% |
| (>= ₹1 lakh) Or (>= 10% of applicable margin) | 1.0% |
- If your margin shortfall continues for more than 3 consecutive days, the exchange applies a penalty of 5% for each subsequent instance of the margin shortfall.
- If you have more than 5 instances of shortfall in a calendar month, the exchange applies a penalty of 5% for every further instance of the shortfall.
- For MCX, if the exchange reports your margin shortfall 3 times or more during a month (in consecutive instances or 3 different instances), the penalty will be 5% from the 4th instance of the shortfall.
When the penalty appears in your account
If the exchange charges a margin penalty, the due date for reporting margins to the exchange is T+5 days. Zerodha posts the entry on your funds statement on the T+6th day once Zerodha receives the penalty file from the exchange. It appears in your statement on Console with the narration "{segment} short-margin penalty for date yyyy-mm-dd".