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    Buy Now Pay Later MTF

    How are Cash and Shares-as-Margin (SAM) limits/margins blocked and released for a MTF position?

    When an MTF (Margin Trading Facility) position is created using both Cash Margin and Shares-as-Margin (SAM), margin blocking and release will follow the below sequence.

     

    Limit/Margin Blocking Process at the Time of Purchase

    At the time of creating an MTF position:

    • Available SAM limits are utilized first toward the margin requirement.
    • Any remaining margin requirement is then blocked from the available cash balance.

    This ensures efficient utilization of pledged securities before cash funds are used.

     

    Margin Release Process at the Time of Sale

    When an MTF position is fully or partially sold, the margin is released in the reverse order:

    • The Cash margin is released first; back to the cash balance.
    • The remaining margin is released as SAM limits, thereafter.

    Illustrative Example

    MTF Margin Required: ₹2,00,000

    Available balances before purchase

    • Shares-as-Margin (SAM): ₹1,50,000
    • Cash Balance: ₹2,00,000

    At purchase:

    • ₹1,50,000 blocked from SAM
    • ₹50,000 blocked from Cash balance

    If 50% of the position is sold (₹1,00,000 margin released):

    • ₹50,000 released to Cash balance first
    • ₹50,000 released to SAM limits thereafter

    Key Principle

    • Blocking Order: SAM → Cash
    • Release Order: Cash → SAM

    This process applies automatically for both partial and full square-off of MTF positions

    What is Margin Funding (MTF)? Where can I see my MTF stocks after buying them? What is Trigger Price in MTF? What Happens if the Stock Price Falls Below It? What are the different action options in the MTF page? Will I get the dividends paid by the company if I buy the stock in MTF? How can I convert my MTF (Pay Later) positions to delivery? How to find out the interest charged for my MTF trades? What is the impact of Corporate action such as Bonus Issue or Stock Split on my MTF position? What is Trade-to-Trade segment (T2T)? What happens to my MTF position when stock goes into Trade-to-Trade segment (T2T)? What are Group 1 stocks? What happens if stock bought in MTF moves out of Group 1? What is the maximum position that can be taken in a single stock through MTF? Why are my profits from MTF are not available in current limits? Can we check shortfall amount or additional margin required for MTF position in the App? If I take multiple MTF positions in the same stock on different dates, which date will be considered for expiry? Why is my MTF position squared off/closed/sold by ICICI Direct? What are the maximum holdings/limits that can be created in MTF? Why is my trigger price above the current price of the stock?
    What is the process of pledging? Will there be any charge on Pledging/Un-pledging the shares? Can I square off or convert to delivery my pledged MTF position? Why have I not received any pledge link/instruction for my MTF positions? Why is my Pledge not confirmed in MTF? What is CSMFA and why are my shares auto pledged in MTF in CSMFA?
    How does MTF Work? Who should use MTF? How to monitor your MTF positions for margin shortfall? What are the costs involved while transacting in Pay Later- MTF? What is the interest rate charged for taking position in MTF? How long can I hold my stock/positions in MTF? What is the margin required for creating positions in MTF? Is the margin required for buying the stock, same whether we use cash or limits from Shares as Margin? On what amount is the interest charged while transacting through Pay Later – MTF? Why are my MTF shares not shown in Demat Holdings on ICICI Direct? Impact of Stock Split on your MTF Position in BEML Limited Why has margin been released from my MTF position? What happens if there is a margin shortfall in my MTF position with ICICI Direct? What will happen if my outstanding MTF interest is not paid? Why can’t I convert my MTF positions to Delivery (CTD)? Can I replace Shares as Margin (SAM) limits used to create MTF position with Cash Margin and Vice versa?
    Why is interest charged on my MTF position even after I have squared off/sold it? How is Interest Charged for MTF? What is “Interest on MTF(SAM)” and why am I being charged this? Where is the MTF interest debited from?
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