STOCK LENDING AND BORROWING MECHANISM (SLBM)

SLBM: Stock Lending And Borrowing Mechanism


SLB or stock lending and borrowing is a system in which a trader can borrow shares that they do not already own or can lend the stocks that they own.

An SLB transaction has a rate of interest and a fixed tenure.

Securities lending and borrowing Mechanism


Why do traders do stock lending & borrowing?

Lenders – Lenders can earn extra income by lending the stocks from their portfolio.

Borrowers – Borrowers can borrow the stocks for arbitrage, for short selling or to avoid the physical delivery.

Benefits of SLB


Additional Income:

Generate additional income from the idle portfolio.


Multiple stocks:

Securities on which derivatives are available in the F&O segment are available in slb segment.


No counter party risk:

Securities lending and securities borrowing transactions are guarantee by NSCCL. NSCCL act as a financial guarantor for SLB product.


Avoid physical settlement:

No issues of physical settlement has you can borrow the stock from slb and avoid physical settlement.

How to get started


To apply online – Follow given path - Login > New product > segment access > SLB

Frequently Asked Questions (FAQs)

  • Which stocks I can lend in SLB?

    Presently securities on which derivatives are available in the F&O segment are available for transactions in SLB.

  • Charges for the slb transaction.

    Brokerage of 15% plus GST will be levied on the lending fee

  • What are the various margins applicable to the borrower & lender on T Day?

    In case of borrower only the lending fee is levied upfront as margin. b) In case of lender, 25% of the lending price (T-1 cash market closing price) and Mark to market (MTM) at end of day are charged to the lender. These margins are not applicable to lender in case if lender does Early Pay-in of securities.

  • What margins are applicable to the borrower & lender from T+1 to reverse leg settlement day (Reverse Leg)?

    No margins are levied on the lender.

    100% of lending price, Value at Risk margins, Extreme Loss Margins (same as applicable in Cash market for buying or selling a security) and EOD MTM are levied on the borrower.

  • What are the counter party risk in SLB

    NSCCL (National Security clearing co-operation limited) act as an financial guarantor for the slb , hence the risk is cover by them.

  • What is Rollover, recall & repay option.

    Rollover is an option where client can rollover (shift) the current month position to next month.

    Recall is an option where client can recall the shares before the end of contract.

    Repay is an option used by borrowers to repay the shares before the contract expiry.

  • What happen in case dividend is announced between slb contract.

    All the benefits will be forwarded to the lenders.

  • When will the shares leave lenders demat

    Shares lent will exit the lenders demat on T day itself.

  • What is the minimum and maximum contract duration for SLB.

    Minimum Contract is for one month and maximum contract is for 12 months.

  • Can NRI client do both lending & borrowing ?

    No NRI client can only do lending.

DID YOU KNOW? As an NRI/OCI, you can invest in IPOs, Mutual Funds and purchase Shares, ETFs or convertible debentures of an Indian company through stock exchanges. All it takes is linking your NRO or NRE account to an active NRI Demat account in India on a repatriable or non-repatriable basis, based on your requirements. Click here to learn more about NRI 3-IN-1 Account

OPEN YOUR NRI ACCOUNT NOW!

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