We recently revised our interest rates on MTF and have gained a lot of love since from our users. (In order to understand our detailed product update, you can refer to this article).
To further help you make the most of margins on Dhan, we are here with yet another significant update to our Margin Trading Facility (MTF) policy.
Client-wise MTF exposure will be doubled from ₹50 L to ₹1 Cr per user.
Individual holding cap has been increased from ₹10 L to ₹20 L per MTF holding in line with the stock concentration limit of 20%
In case the above concentration margin is being breached, an additional concentration. margin of 25% will be charged as per the existing process.
Additionally, the numbers of scrips along with limits on these scrips have further been revised. You can view the updated list here.
Effective interest rates will be now be as follows:
MTF Funded Value
Interest Rate (p.a.)
Upto 5 lac
12.49%
5 lac to 10 lac
13.49%
10 lack to 25 lac
14.49%
25 lac to 50 lac
15.49%
50 lac to 1 cr
16.49%
We hope these updates help you make better use of MTF on Dhan. While leverage can amplify gains, it also increases risk, so remember to use it with caution. Always monitor your margin status closely, stay within prescribed limits, and ensure you have a solid personal risk management plan in place.
My humble request, this time if any “unfavorable market conditions” come like last year February 2024, I would request to maintain the MTF exposures as is, or atleast maintain a comfortable 2x, unlike last time where I was completely paralysed for many months and even Zerodha didn’t have MTF back then, so I had no option but to sit ducks.
Another request, please improve Dhan web as I mainly use Dhan web to trade because it is more of a terminal use-case for me.
I don’t think anyone would allow that. Even banks become strict on giving loans to retail during a bad economy , or when NPA"s are high (think 2018 -2020 situation).
Similarly they will only allow you to buy the top using margin. During actual bear markets, margin provider to Dhan would rather buy the Index tiself, than collecting 15% pa by loaning it to people.
Only the rich and powerful have access to money during desperate times, and that’s how they become even richer in the next bull phase.
The MTF limit is set to 1 cr right now. Once you use more than 50% of the existing limit assigned to you, you will automatically see an option to increase your limit from the same section.
We’ve created these slabs so that your MTF utilisation looks realistic and easy to understand. Otherwise, if someone uses ₹50k but their limit is ₹1 crore, the utilisation would appear extremely tiny and not very meaningful. This way, users get a clearer picture of how much of their limit they’re actually using. Additionally, this also helps us manage overall fund allocation smoothly in the backend, ensuring limits are available to users when they need them.
Hope this helps! Let us know if you have more questions.
@Pranita The idea is good, but it can also be implemented on the basis of slabs, because I feel 1 lakh or 5 lakhs is kind of an arbitrary number.
Instead if the customer is on the <5 lakh interest rate slab, then 5 lakhs can be displayed, and then 10 lakhs and so forth. Would help with the mental math. Just an opinion of mine that I feel would work well.
