When trading under Margin Trading Facility (MTF), interest is charged on the Funded Amount provided by Lakshmishree.
- Interest Rate: 18% PA on the borrowed amount.
- Calculation Starts from T+1 day (one day after purchase settlement).
- Interest is Charged Daily until the funds are repaid.
Example:
Suppose a trader Buys stocks worth ₹1,00,000 under MTF.
They pay ₹30,000 from their own funds, and Lakshmishree funds ₹70,000.
If the trader holds the stock for 5 days, the interest will be calculated as:
₹70,000 × (18 ÷ 365) × 5 = ₹172.60
Thus, ₹172.60 will be the interest charged for 5 days.
Traders should carefully track their MTF positions to avoid paying unnecessary high interest.
Note: MTF requirements must be properly taken care of to avoid liquidation and margin shortfall.