Loan Against Securities (Beta)

[TradeB2B]

@siva-reddy please come to margin funding

[AG_1984]

Hi @siva-reddy, I got my response . Thanks

I have few more questions , can you please put some more lights on those ?

1. Suppose one of my holding XYZ which is pledged to Zerodha Cap , i need to sell it immediately due to some urgent reasons , can I request zerodha Cap to sell it in behalf of me ? If not what is the process to do so ? Because some times we don’t have time and money with us to de-pledge it first and then sell .
2. If we sold through Zerodha Cap , what will be the brokerage fee in that case ?
3. Can we get loan against mutual funds, Fixed Deposit ?

[Karthik]

@AG_1984

Suppose one of my holding XYZ which is pledged to Zerodha Cap , i need to sell it immediately due to some urgent reasons , can I request zerodha Cap to sell it in behalf of me ? If not what is the process to do so ?

1. No, this wont be possible. You will have to replace a security of similar worth, un pledge, and sell the share.

@AG_1984

f we sold through Zerodha Cap , what will be the brokerage fee in that case ?

As I mentioned, this is not possible as Zerodha Capital is not a broker. Zerodha capital will sell only if you default or don’t adhere to the LTV calls.

@AG_1984

Can we get loan against mutual funds, Fixed Deposit ?

Loan against MF is possible, but we will need a few more weeks to enable it.

[Karthik]

@sandeep_reddy_muriki

Will i get margin for trading as well as loan against same pledge?

No, you wont be able to repledge the already pledged shares.

[Prakhar_Agrawal]

@Karthik

As I mentioned, this is not possible as Zerodha Capital is not a broker. Zerodha capital will sell only if you default or don’t adhere to the LTV calls.

When will the amount of sale recipt in excess of loan amount will be credited to bank account.
Secondly since zerodha cap is nbfc and not broker in case of any default or misuse of security what kind of remedy would be there since there won’t be IPF. Btw i assume that zerodha cap would be adeqately funded though.
And at last since security would be in zerodha caps account , can it lend securities in market or re pledge them or use it for any purposes as there won’t be sebi here .

[AG_1984]

@Karthik

No, this wont be possible. You will have to replace a security of similar worth, un pledge, and sell the share

Hi @siva-reddy , thanks for the clarification . can you let me know how much time will be taken to free the pledged shares if new fund added or security added with same worth ?

[Karthik]

@AG_1984

can you let me know how much time will be taken to free the pledged shares if new fund added or security added with same worth ?

This can take about an hours time i.e. to unpledge. Once unpledged, it will show on Kite the next day and you can freely sell the same.

[pravin_patel]

@Karthik @siva-reddy I tried to apply for LAS on zerodha capital. I got an error, I have raised a ticket with ticket ID #20201215770639. Kindly check.

[Wizard_1819]

nice initiative.All the very best

[Karan_Johar]

I know that one shouldn’t
But can one invest the funds anywhere including In equities on kite app from the loan ( from the pledge of shares ) ,is that legally allowed ?
Also would like to have a seperate app for zerotha q/a , zerotha capital …that ll provide amazing experience

[Saurabh_Singh1]

Hi Karthik,

A couple of queries for you please -

1. With the current RBI Repo Rate at 4% + LTRO scheme for NBFCs in vogue, why is Zerodha charging 10.5% rate of interest for LAS?
   ICICI is offering LAS at 8.25-8.50% while Axis is offering LAS at 8.30-8.50%.

Zerodha’s offering seems relatively pricier. Any plan to offer a more competitive rate?

2. In Bank LAS, once can deposit/ withdraw money on a daily basis.
   Eg: If i have a 50 lakhs limit & withdraw 40 lakhs today, i am charged interest for 40 lakhs today & if tomorrow morning i deposit back 2 lakhs; the interest charged for tomorrow will be calculated at 38 lakhs.

Does Zerodha’s LAS work in a similar fashion in terms of ease of operations?

3. If i take a LAS of Rs. 50 lakhs, do i need to return the 50 lakhs at the end of 12 months mandatorily even if i am servicing the interest payments every month regularly?
   Is the maximum time period of 12 months a limit or is there a need to renew the loan afresh every 12 months.

Request, if you can clarify

Regards,
Saurabh Singh

[MrMorningStar]

@Karthik

Please reduce the interest rate for LAS, and make it competitive.
It’s virtually risk free money.

Is it possible to pledge, say, 10L with zerodha capital and only use and pay interest on variable amount (say 2L) calculated EOD.

Also, possible to pledge SGB? NIFTY Index anytime soon?

Point 2 is important because 430 INR is lost if one has to do this again and again.

Does the LAS continue year on year, and one doesn’t have to re-apply?

Thanks

[SatyaRao]

Is LAS facility available for NRI customers trading with NRE account?

[UttamKumar]

@Karthik, @siva-reddy I have applied for LAS on saturday 23rd jan 2021. I completed all the steps like paying fees of Rs. 436/-, “initiate pledge” and finally reached the step of “confirm pledge”. At this step, i get the error. sometimes it is “Error code ERR003” and sometimes it is “Epledge request rejected”.

I have also raised a ticket #20210125192564

Please help.

[Karthik]

@UttamKumar

“Error code ERR003”

This is an error from CDSL, can you please retry applying?

[UttamKumar]

Hi karthik,
Thanks for your instant reply. I was getting this error code ERR003 on saturday (I had retried multiple times but the same error).
Then, when I retried it again yesterday (sunday), i started getting “Epledge request rejected” error. Yesterday, for all the 6-7 retries, i was getting the same “epledge request rejected” error.

Today, when i tried “apply now” from the zerodha capital, it takes me to my zerodha console dashboard page (instead of the loan page). So, I am not able to initiate pledge today.

[Karthik]

@UttamKumar

Today, when i tried “apply now” from the zerodha capital, it takes me to my zerodha console dashboard page (instead of the loan page). So, I am not able to initiate pledge today.

Hey Uttam, Console is going through a major upgrade (I’m sure you’ll love the new version) and the team is working non stop to make this smooth. Should be up and about in some time.

[sudheer_kumar]

Hi @Karthik sir,
would love to know the summary of the changes that you mentioned were coming to console.Any z-connect blog?

[yuvananda]

That’s some news right there. So now both Coin & Console are going to get major updates! I guess both will happen at the same time. Any ETA on this?

[Prayag]

I found a few threads which mention about the upcoming features in Console. Likely many of the features mentioned on those threads would be included in the new version of Console. Sharing the list of the threads that I could find -

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@Nakul

We’re working on the next version of Console in which we’re trying to make it easier to track your portfolio. Net payin and XIRR are already part of our list of things to do, which you can expect in the next version.

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@Nakul

Hey @Srini_Yarramsetty, this will be coming in the next version of Console, our team is currently working on. The reports are being cleaned up and all the relevant data are being added. The trading charges, which is currently available on the scripwise P&L sheet, will be made available on the tradebook as well for your perusal. The DP charges and all the other charges posted directly on the ledger will appear separately as other credits and debits as it isn’t really possible to apportion these costs at each individual trade level. We’ll keep you updated when we take this live.

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@Nakul

@curiousvi

2. I can see short term trades for all those scrips which I have bought and sold but I don’t see govt charges like STT on the scrips that are in my holding (have not sold yet) - How can I see govt charges of all the trades (equity delivery ) irrelevant I have sold them or not.

We had made the scrip-wise charges available on Console. Currently, we have disabled this feature for some optimizaton. We’re currently working on the next version of Console in which you’ll not only get the charges on the P&L, but you’ll also have tradewise charges on your tradebook.

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@Nakul

@ManoranjanS

Also, in Tax P&L Report, shares tendered in buyback needs to classified differently since these are taxed differently (0%) compared STCG & LTCG

We’ve made the required changes for this in the next version of Console reports. This will be taken live soon.

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@Nakul

Yup, your suggestions make sense. We are working on a new version of Console which will be launched soon with a lot of UI/UX developments and some exciting new features for analytics. We’re also cleaning up all the reports for this. We’ll make the necessary changes in the next version.

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@siva-reddy

Yeah, tagging for each order will come on our back office console soon.

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@Nakul

Hey @simhan, we’re launching a new version of Console in the next couple of weeks. The consideration of the P&L in foreign MF is done correctly, as mentioned by you, in our new reports.

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@Nakul

Some of the new features on Console v2 will include a daily digest to inform the customer about everything that’s happened in his account, and a feature for tagging your trades and generating the P&L based on the tags. You could potentially tag your trades based on the reason you took them and analyse what’s worked for you and what hasn’t. Unfortunately, we won’t be able to give you a timeline on this right now, but our aim is to take it live as soon as possible.

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@siva-reddy

We are working on new console version along with many other new features, will try to add in that.

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