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Pledge creation is the process of offering Demat securities as collateral for margin or loans, with fees charged by depositories.
Zerodha (Flat Rs 20 Per Trade)
Invest brokerage-free Equity Delivery and Direct Mutual Funds (truly no brokerage). Pay flat Rs 20 per trade for Intra-day and F&O. Open Instant Account and start trading today.
Pledge creation refers to the process of pledging shares in a Demat account as collateral to obtain a loan or margin from brokers or banks. When investors pledge securities, they retain ownership but grant the lender rights if repayment obligations are not met. Depositories (NSDL/CDSL) charge fees for pledge creation, which are passed on to investors by brokers.
Key Points:
Shares remain in investor’s Demat account.
Can be pledged for loans or margin.
Depository charges small fees per transaction.
Ownership stays, but lender has rights if default occurs.
Mandatory approval through OTP/e-authorization.
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