How can I avoid paying interest on cash component deficiency?

How can I avoid paying interest on cash component deficiency?

To avoid interest charges, ensure that you maintain the required 50% of the margin as cash component. You can also consider maintaining a higher percentage of cash component to provide a buffer against any potential deficiencies.


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    • Is there any flexibility in the cash component requirement?

      While the minimum requirement is 50% of the margin, you can choose to maintain a higher percentage of cash component to avoid potential deficiencies and interest charges. Illustrative table appended below considering various scenarios: Scenario ...

    • What happens if I don't maintain the required cash component?

      In case of deficiency in the cash components, interest will be levied at the rate of 1% per month for shortfall amount. It's important to maintain the required cash components to avoid incurring these charges.

    • How is the interest calculated?

      Interest will be levied on the deficiency of cash components at the rate of 1% per month on shortfall amount. The interest will be calculated on a daily basis.

    • What are cash components?

      Cash component is the margin which is considered as a cash or cash equivalent. Examples: Cash transferred from your Bank LIQUIDBEES ( NIP IND ETF LIQUID BEES ) ICICILIQ ( ICICIPRAMC - ICICILIQ ) LICNETFGSC ( LICNAMC - LICNMFET ) LIQUIDETF (DSPAMC - ...

    • What are non-cash components?

      Non-cash component is the margin which is provided by pledging securities as collateral. All the Equity Stocks ( eg: Reliance, TCS) and Stock/commodity based ETF (eg: NIFTYBEES, GOLDBEES).