What is Pledge?

Pledge for Margin is a facility that allows you to use eligible holdings in your demat account—such as stocks, ETFs, or SGBs—as collateral to receive margin for trading. Instead of blocking cash, you can pledge these holdings and receive margin based on their collateral value after applicable haircuts.

When securities are pledged, they remain in your demat account and only a lien is created in favour of the broker. The broker may re-pledge these securities with the clearing corporation (National Clearing Corporation-NCL) to obtain margin, as per SEBI-prescribed mechanisms. You continue to receive corporate benefits like dividends and bonuses.