SLB on WebNotes

DDPI requirement for SLB

Wed, 20 May 2026 00:00:00 +0000

For SLB activities on Zerodha, DDPI (Demat Debit and Pledge Instruction) must be signed:

Allows the broker to move shares from your demat for SLB lending.
Allows pledge / un-pledge for SLB collateral.
Replaces older PoA / TPIN-per-trade workflows.

Why required

SLB requires:

Movement of shares from lender’s demat to borrower’s demat.
Pledge of borrower’s collateral.

Without DDPI, each move would require per-trade TPIN + OTP, making SLB operationally impractical.

NRI / HUF / Corporate SLB access

Wed, 20 May 2026 00:00:00 +0000

NRI, HUF, and Corporate clients can access SLB on Zerodha with specific additional documentation:

NRI

NRI demat account (NRO / NRE depending on type).
FEMA / RBI declarations.
Tax declarations (DTAA where applicable).
Repatriation status documented.

HUF

HUF demat account.
HUF PAN.
Deed of HUF.
Karta authorisation.

Corporate

Company demat account.
Board resolution authorising SLB.
KYC for authorised signatories.
Tax declarations.

Tax considerations

Each entity type has different tax treatment for SLB income:

POA for SLB on Zerodha

Wed, 20 May 2026 00:00:00 +0000

Power of Attorney (POA) for SLB on Zerodha has been replaced by DDPI per SEBI’s 2022 framework changes.

Historical POA

Pre-2022:

Full PoA gave the broker broad authority over demat / trading account.
Required for SLB to facilitate share movements.
SEBI deprecated this for retail clients due to risk of misuse.

Current DDPI replacement

DDPI is narrower in scope.
Specifically authorises broker for: sell, pledge, margin operations.
Required for SLB specifically (see DDPI requirement for SLB ).

For new SLB users

Sign DDPI during onboarding.
No PoA needed.
Per-trade T-PIN typically not required for SLB.

Legacy PoA accounts

If you signed a PoA earlier:

SLB approved securities list

Wed, 20 May 2026 00:00:00 +0000

SLB-approved securities on NSE are listed equities meeting specific eligibility criteria. The list is maintained by NSE Clearing and updated periodically.

Eligibility criteria

Liquid scrips: Sufficient market liquidity.
F&O availability: Often (not mandatory).
Not under surveillance: No ASM Stage 2+ / GSM 4+.
Standard rolling settlement (not T2T).

Where to find the list

NSE website > SLB segment.
Zerodha’s SLB interface (filters to approved scrips).
Updated quarterly with revisions.

Typical scrips

Most Nifty 50 constituents.
Top mid-caps.
Select large-cap mid-cap stocks with F&O availability.

Implications

For lenders: only approved scrips can be lent.
For borrowers: only approved scrips can be borrowed.
New listings may take time to enter the SLB-approved universe.

External references

References

NSE Clearing, SLB approved scrips, nseclearing.com.
SEBI, SLB framework, sebi.gov.in.

SLB bids and offers interpretation

Wed, 20 May 2026 00:00:00 +0000

The SLB order book shows bids and offers per scrip:

Side	Meaning
Bid	Borrowers willing to borrow at this rate
Offer	Lenders willing to lend at this rate

A trade matches when the bid >= offer (i.e., a borrower is willing to pay at least what a lender wants).

Example

For a scrip:

Best bid: 10% (a borrower offering to pay 10% annualised).
Best offer: 8% (a lender wanting at least 8%).

Trade executes at some price within this range, typically 9% (midpoint) or per the matching algorithm.

SLB charges on Zerodha

Wed, 20 May 2026 00:00:00 +0000

SLB charges on Zerodha include:

Cost component	Detail
Lending fee	Net to lender; based on agreed rate (e.g., 8% per annum)
Brokerage	Per Zerodha’s SLB pricing
STT	On the sell-side of SLB (where applicable)
Exchange transaction charge	Per NSE / BSE
GST	18% on brokerage + exchange charge
Stamp duty	Per state
SEBI fee	Standard

Lender perspective

The lending fee is the lender’s main income source. Net of charges:

Gross lending fee (e.g., 8% per annum on borrowed amount).
Minus brokerage / charges.
Net to lender: ~6-7% per annum typically.

Borrower perspective

The borrower pays:

SLB eligibility criteria

Wed, 20 May 2026 00:00:00 +0000

SLB eligibility criteria at Zerodha:

Participant	Eligible?
Individual (resident)	Yes
NRI	Yes (with specific documentation)
HUF	Yes
Corporate	Yes
FII	Yes (separately regulated)
Mutual fund	Yes (separately regulated)

Plus:

Active Zerodha account.
KYC verified.
DDPI signed.
SLB segment activated.

For NRI / HUF / Corporate

Specific documentation:

NRI: Additional KYC, repatriation status, RBI declarations.
HUF: HUF PAN, deed of HUF.
Corporate: Board resolution, corporate KYC.

For details: NRI / HUF / Corporate SLB access .

SLB facility availability windows

Wed, 20 May 2026 00:00:00 +0000

The SLB facility on NSE operates during normal equity market hours: 09:15 to 15:30 IST. Some specific windows within:

Activity	Time
Order placement	09:15 to 15:30
Matching	Continuous during session
Settlement	T+1

Outside these hours: no SLB trading.

Holidays

SLB closed on exchange holidays (per Zerodha holiday list 2026 ).

Monthly cycle

SLB contracts have monthly tenors (typically). Trade entry can happen any session day; the contract runs to the agreed maturity.

SLB lending rate

Wed, 20 May 2026 00:00:00 +0000

The SLB lending rate is the annualised percentage fee the borrower pays to the lender. Set by market demand-supply on the SLB order book.

Typical range

Scenario	Rate
Very high demand (high short interest)	10-20%+ per annum
Standard	5-10% per annum
Low demand	3-5% per annum

What drives the rate

Short interest: High = high demand for borrowing = high rate.
Liquidity: Less-liquid scrips command higher rates.
F&O availability: Scrips with F&O have alternative shorting; SLB rates lower.
Corporate events: Upcoming events affect demand.

Example

For RELIANCE (highly liquid):

SLB rollover process

Wed, 20 May 2026 00:00:00 +0000

SLB (Securities Lending and Borrowing) contracts have monthly tenors typically. To extend an SLB position past the original tenor, the rollover process:

Mechanics

Pre-expiry, identify the SLB position to roll over.
Reverse the existing position at the contract’s settlement.
Initiate a new SLB for the next cycle at current market rate.
Confirm both legs via the SLB interface.

When to roll

Borrower wants to continue short position: Roll the borrow contract.
Lender wants to continue earning fee: Roll the lend contract.
Both parties must agree to roll.

Considerations

Lending rate changes each cycle based on demand / supply.
Margin requirements may shift.
Tax implications for each cycle.

For tax: each SLB transaction (lend / borrow / roll) creates an accounting event. Consult a CA for complex tax situations.

SLB trade memo on Zerodha

Wed, 20 May 2026 00:00:00 +0000

The SLB trade memo is the record of an SLB transaction on Zerodha. Each SLB lend or borrow generates a memo.

What it contains

Scrip and quantity.
Lending rate (annual %).
Tenor (typically monthly).
Maturity date.
Counter-party details (anonymous).
Charges breakdown.

Where to access

Console > Reports > Tradebook (filtered to SLB).
Email confirmation post-trade.
Console > Portfolio > SLB positions.

For tax / reconciliation

The trade memo is the source-of-truth for:

Tax on SLB income

Wed, 20 May 2026 00:00:00 +0000

SLB lending income is generally taxed as:

Income from other sources for occasional lending.
Business income for active / professional lending.

Specifics

Aspect	Treatment
Lending fee	Taxable income
TDS	May apply (10% TDS on payments above threshold)
Set-off against losses	Per general rules
Deductible expenses	Brokerage, charges (for business income classification)

For NRI / HUF / Corporate

Specific rules apply; DTAA / FEMA framework relevant for NRI.

For complex tax situations involving SLB income, consult a Chartered Accountant before filing.

How to borrow shares via SLB on Zerodha

Tue, 12 May 2026 00:00:00 +0000

Borrowing shares through the NSCCL Securities Lending and Borrowing (SLB) platform on Zerodha allows investors and traders to obtain shares for delivery-based short selling or hedging strategies. Unlike intraday short selling (MIS), which must be squared off by day end, SLB borrowing enables multi-day or multi-month short positions in eligible equity shares. The borrowed shares arrive in your demat account via NSCCL settlement and can be sold on the exchange like regular delivery shares.

How to handle an early SLB recall on Zerodha

Tue, 12 May 2026 00:00:00 +0000

An early recall in the Securities Lending and Borrowing (SLB) framework refers to the lender’s right to demand the return of lent shares before the agreed series expiry date. Under SEBI’s SLB framework, lenders have an unconditional right to recall shares at any time; the borrower must return the equivalent shares within the recall settlement period or face a close-out by NSCCL. Early recalls are most common when lenders need to sell the shares (for example, in response to a price target being reached), when corporate action entitlements require the lender to hold the shares directly, or during high-volatility periods.

How to lend shares via SLB on Zerodha

Tue, 12 May 2026 00:00:00 +0000

Securities Lending and Borrowing (SLB) allows long-term equity investors to earn a fee by temporarily transferring shares to borrowers (usually traders who wish to short-sell) while retaining the economic benefit of the position for the lending period. On Zerodha , SLB is accessed through Console and operates on the NSCCL (NSE Clearing Limited) SLB platform. The clearing corporation guarantees both sides of the transaction, so lenders face clearing-corporation counterparty risk rather than individual borrower default risk.

SLB on WebNotes

DDPI requirement for SLB

Why required

NRI / HUF / Corporate SLB access

NRI

HUF

Corporate

Tax considerations

POA for SLB on Zerodha

Historical POA

Current DDPI replacement

For new SLB users

Legacy PoA accounts

SLB approved securities list

Eligibility criteria

Where to find the list

Typical scrips

Implications

See also

External references

References

SLB bids and offers interpretation

Example

SLB charges on Zerodha

Lender perspective

Borrower perspective

SLB eligibility criteria

For NRI / HUF / Corporate

SLB facility availability windows

Holidays

Monthly cycle

SLB lending rate

Typical range

What drives the rate

Example

SLB rollover process

Mechanics

When to roll

Considerations

SLB trade memo on Zerodha

What it contains

Where to access

For tax / reconciliation

Tax on SLB income

Specifics

For NRI / HUF / Corporate

How to borrow shares via SLB on Zerodha

How to handle an early SLB recall on Zerodha

How to lend shares via SLB on Zerodha