SLBM - next passive income stream for small investors?

Trading
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SLBM - next passive income stream for small investors?

Renting Our stocks via SLBM (Stock Lending and Borrowing) - But Taxes (GST and others) , CDSL charges , Brokerage are not sure at Zerodha since its in the coding stage . Dhan offers 4.9 perc as per this reference video

Details on SLBM : Online Share Market Trading | Stock Market Trading & Investment in India - SBI Securities

Strategies checked
Borrow through SLBM for short, hedge with MTF delivery buy.

  • Is this a good strategy?
  • Too risky ?
  • No chance of profit ?
  • Does SBLM with option better?
    From AI Analysis
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SLBM can be a powerful, low-risk income option for investors and an additional business opportunity for brokers.
Let’s bring this to mainstream retail investors — faster, cleaner, and better.

My Request to Zerodha, Groww, and Other Brokers

First, I want to personally thank the Dhan team for creating such an amazing and clean interface for SLBM (Stock Lending and Borrowing Mechanism) — even though I’m not using Dhan, I truly appreciate the effort they’ve made to bring this feature forward for retail investors.

Now, I’d like to request all leading brokers — Zerodha, Groww, Angel, Upstox, ICICI Direct, HDFC Securities, and others — to please focus on building a better SLBM ecosystem.

:one: Build a robust SLBM platform

This segment is still in its early phase, and a better ecosystem can help even small retail investors participate and earn passive income safely.
SLBM can become a new compounding layer in every investor’s portfolio.

:two: Affordable and transparent pricing

Please set an affordable brokerage plan for SLBM.
Even a small nominal charge per lending transaction can become a steady revenue stream for brokers, while encouraging participation from small investors.

:three: Better interface and analytics

Provide a simple, intuitive interface with:

  • Detailed reports on lending income
  • Historical performance and yield tracking
  • Clear contract status (active, returned, corporate actions, etc.)

This will build trust and transparency for investors who are new to this concept.

:four: Fast implementation — not a 5-year plan

Please introduce the feature within 3 months, not as part of a distant 5-year roadmap.
Investors are ready for this today — we just need the right tools and access.

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Not useful for pledging for margin and selling options :pleading_face:

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Dhan provides SLBM right now, but Zerodha can definitely do it better. Please consider adding an easier and cheaper SLBM option. When short-selling is costly or complicated, liquidity drops and some low-float stocks shoot up 15–20% with no sellers.
A simple one-click SLBM with capped fees (around 0.3% or â‚ą20) would attract more participation, improve price stability, and strengthen overall market balance.

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Agreed , I am waiting for that . But not sure it’s helpful for me,after usage only we can understand it’s benefits.
Slbm may impact the auction market ,since any one can borrow from slbm instead of auction.
. Hope groww will also start this .

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Yes, small (retail) investors who have idle shares in their demat accounts can use the Stock Lending and Borrowing Mechanism (SLBM) as a legal and controlled source of passive income. Investors can profit from their current long-term assets without having to sell them thanks to this exchange-backed method.

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Hello @siva , Is the online SLBM lending/borrowing module under development?
I understand that Zerodha currently offer SLB through an offline process only (as per your FAQ: “you must currently place all SLB orders through offline mode only”).

  1. Whether an online screen-based interface (via Console or Kite) for placing SLB orders (lending / borrowing) is currently being developed or planned? .
  2. If yes, what is the expected roll-out timeframe (alpha/beta/testing stage)?
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Yes, online and will be on kite.

We have few more important product line up planned so should be before end of next quarter.

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@siva Thank You for the confirmation . Since its via Kite does this include our secondary holding stocks?

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Most likely it will, will give out more details as and when we are close to beta release.

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Siva, do you mean “Kite Terminal Mode”, as mentioned by Nithin below?

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SLBM is not part of terminal mode, that is totally a different product.

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@siva International investing we need - like vested one - not limited stocks , fully we need to access like ETf Etc - please bring some usefull fully fledged international investing

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Yes, will allow everything ( not f&o).

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no need this elephant instrument

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@siva I see margin trading is banned as per RBI. But you can buy options without margin with full cash. So that shouldn’t be banned. Right?