How much are the charges for SLBS?

Last Updated: 24 Sep 2025

Stock Lending and Borrowing, or SLB, often looks like a small note in a demat account statement, yet behind that sits a tool that keeps India’s equity market liquid, transparent, and efficient. Whether you’re a day trader searching for arbitrage or a long-only investor trying to squeeze yield out of dormant shares, understanding the cost of participating in SLB can make a big difference to your returns.

Many first-time participants type the phrase ‘how much are the charges of SLBs’ into their browser before they even open a trading app. In this guide, we will break down those costs, explain how the scheme works, and show why more traders and investors are giving SLB a try.

What is Stock Lending and Borrowing (SLB)?

Imagine you own 1,000 shares of a blue-chip stock that you plan to hold for years. For most of the year, those shares simply sit in your demat account, doing little more than fluctuating in price. SLB lets you lend those otherwise idle shares to a market participant who needs them temporarily. In return, you earn a fee and get your shares back at the end of the agreed tenure.

On the flip side, consider a trader who wants to initiate a short-sell in the futures market or meet delivery obligations in the cash segment. That trader may not own the shares right now, but with SLB, they can borrow them for a fixed period, execute their strategy, and return the shares later.

All borrowing and lending is routed through a clearing corporation, which acts as a central counterparty. This setup eliminates credit risk for both parties. Lenders enjoy an extra stream of income, while borrowers gain legal access to shares they don’t currently own but need for trading strategies, hedging, or arbitrage.

Charges for Securities Lending and Borrowing Scheme (SLB)

Fees in SLB come from three main categories:

• Transaction fees and clearing charges

Every time you lend or borrow shares, the clearing corporation levies a small charge. These fees cover settlement, risk management, and the systems that make SLB possible.

• Brokerage and platform costs

Your broker may charge a flat fee or a percentage of the transaction value for facilitating the order. Rates vary widely, so it pays to shop around.

• Lending fee (the interest component)

The agreed SLB interest rate is the fee a borrower pays to a lender for the right to use those shares for a fixed tenure. Popular, hard-to-borrow stocks can command high rates; liquid, widely held names often settle at negligible levels.

Illustrative Scenario

Suppose you lend 1,000 shares of XYZ Ltd., each priced at ₹400, for a one-month series. The borrower agrees to pay 2% annualized. Your gross earnings come to:

₹400 × 1,000 × 0.02 × (30 / 365) ≈ ₹658

From that amount, deduct the clearing corporation fee – roughly ₹80 – plus your broker’s platform fee, say ₹50. Your net takeaway is about ₹528 for the month. Not life-changing money, but a tidy sum for an asset that would otherwise sit idle.

Different brokers and clearing members publish detailed rate cards, but there is no unified tariff sheet. That is why traders keep asking, “How much, exactly, will this cost me?” The answer often depends on:

• Which stock you lend or borrow
• The demand-supply dynamic for that stock in the chosen series
• Your broker’s negotiated terms with the clearing corporation

Because SLB operates on an auction model, fees can move daily. The smartest approach is to monitor the order book, place limit orders instead of market orders, and stay flexible on tenure whenever possible.

Why Do Traders and Investors Use SLBM?

If you search for SLBM NSE, you will see a full list of permitted stocks and the monthly series available for borrowing. That transparency has led to a steady rise in participation over the last few years. Here are the main use cases:

• Generating passive income

Long-term investors – especially mutual funds, insurance companies, and family offices – lend large portfolios to create a steady, low-risk yield.

• Short selling with compliance

Market participants who need to short a stock for arbitrage or hedging can now do so in full compliance with exchange rules. Borrow first, sell later, cover at expiry, return shares, and move on.

• Event-based strategies

Traders often borrow shares around major index rebalancing dates, merger announcements, or dividend events. Borrowing gives them inventory certainty at a known cost, allowing them to focus on the trade’s upside.

• Meeting delivery obligations

Occasionally, a trader may accidentally create a short delivery in the cash segment. Borrowing through SLB is cheaper and more transparent than paying auction penalties.

• Optimizing capital usage

By lending stocks they are not actively trading, investors unlock a supplemental yield without selling their core holdings. This yield can offset brokerage, demat, and even small portfolio drawdowns.

Conclusion

Brokerage platforms publish updated SLB charges in India so that clients can compare before placing an order. SLB is cost-efficient for both lenders and borrowers when compared with the risks it mitigates. If you are a long-only investor, the scheme offers a way to earn an incremental return that compounds over time. If you are a trader, it provides the inventory you need to execute sophisticated strategies without bending any rules. Understanding the fee structure helps you decide when to participate and when to stay out.