This is how the retainable margin is calculated (extract from NSE’s FAQs):
Example:
Cash - 1 lac
Collateral pledged - 10 lacs
Margin required - 1.5 lacs
First, 50% of the margin required is retained in form of cash i.e. 75k. For the remaining 75k, the collateral pledged balance is checked. In the above example, since collateral is 10 lacs, the remaining 75k can be utilised from it.
The stockbroker can retain up to 225% of 1.5 lacs i.e. 3.375 lacs.
75k is already collected in cash form, so a further 262.5 can be retained. This is available from the collateral.
All margin requirements are covered now (1) 50% of margin used in cash (2) up to 225% margin block
Out of the 1 lac cash balance, 25k is unused free balance. So, it has to be settled.
The additional collateral pledge does not have to be unpledged.
Assume, in the example, the collateral is reduced.
Cash - 1 lac
Collateral pledged - 1 lac
Margin required - 1.5 lacs
Here, since 225% of 1.5 lacs is 3.375 lacs and only 2 lacs is available, the entire cash can be retained by the stockbroker.