Important Update: Reversal of Penalty on Shortfall of Upfront Margin

Important Update: Reversal of Penalty on Shortfall of Upfront Margin for Users.

If you’ve been active in the markets, you must be aware that there have been multiple iterations from SEBI and exchanges on the way penalties are charged on margins provided by stock brokers.

There have been multiple updates on this, based on a SEBI and NSE circular, the upfront margin shortage penalty cannot be passed on to clients. The main highlights of the circular are as follows:

  • Any penalty debited to your ledger due to a shortfall in the upfront margin is reversed.
  • There will be no penalties levied in the future when there is a shortfall in the upfront margin.

Many stock brokers in the industry have raised concerns on this circular and representations were being made by the industry to exchanges as in many scenarios, it was and will be stock brokers who will have to bear such penalties from their own pocket for no reason. Such representations continue to be made.

While that happens, at Dhan we have decided to reverse all margin penalties made to clients and in the next few days, the users of Dhan will see this amount reflecting back in their ledger as a refund.

On a product side, we are already working to introduce Hedge Breaking Alerts soon on Dhan to ensure that users when taking positions against hedged positions, exit the positions in the correct sequence - so as to avoid margin penalties completely. You can read more about this here: Update for Option Traders: Introducing Alerts on Breaking Hedge while Trading on Options on Dhan

Please keep in mind that the margins for positions are required to be maintained in a 50:50 ratio, split evenly between cash and securities ( 100% cash is also fine ) . This is applicable to both you the user and us the stock broker and there has been no change to this ratio. In the event there is a shortfall in this 50:50 ratio, DPC will be applicable.

PS: We recently waived off all DPC charges applicable on delivery based transactions (cash orders in delivery segment) on Dhan. More on that here: Pricing Update: Dhan is waiving off DPC Interest on Delivery-based Transactions | w.e.f 1st Oct'22

We expect to complete refunds as soon as possible. In case you do not receive the margin penalty refund in your account by 30 November 2022, please connect with our customer service team on

Once again, while we initiate and complete the process of refunding the penalties charged in the past, we will ensure that we are compliant with this new directive and continue to bring the best possible trading and investing experience for you on Dhan.

Thank you

Rajesh Jain


Is the MARGIN shortfall back ?

Saw this in LEDGER

@pavz no this is because of DP Transactions - Possibly due to p[ledge and selling of shares (from DP). For details, you can share your UCC, ill get this checked.

Hi @pavz I checked the case. It is due to multiple pledges created for the same scrip and then sold. Let me help you with an example: You bought 100 shares of a company in 4 tranches (on different days) and pledged them. For every pledge, CDSL generates a PSN (Pledge Sequence Number) and treats every pledge request as per PSN. This will attract pledge charges on each day. Now on the 5th day let say you sold them all. So on the 5th day, all four PSNs will be unpledged which will attract 4 x 12.5 (for unpledge) and Rs. 12.5 for Pay-In.

Hope that resolves your query. For your specific case, I’ll ask the CS team to forward your DP Transaction statement for 19th July to your registered e-mail ID.

1 Like