Your funds statement won’t comprise collateral margins as the collateral margin provided is neither added or removed from the balance in your trading account.

Since the collateral margin isn’t reflected in the funds statement, there will be scenarios in which your ledger will show the debit balance when you have used the collateral margin for taking a position. 

Take this example.

Position – Long Nifty Futures 

Margin required – Rs. 1,00,000

Opening Balance on Kotak Neo – Rs. 50,000

Collateral (liquid funds) – Rs. 30,000 (cash equivalent)

Collateral (equities) – Rs. 40,000

According to the regulations, 50% of the margins blocked for overnight derivative positions have to come in the form of cash or cash equivalent. The remaining 50% of the margin requirement can come from non-cash equivalent collateral margins, i.e., margins raised from pledging liquid funds.
 

Component

Available for use

Used

Balance

Opening Balance (Cash)

50,000

30,000

20,000

Cash Equivalent

30,000

30,000

0

Collateral Margin

40,000

40,000

0

Total Margin Collected

 

1,00,000

 


The withdrawable balance is = Opening Balance – Utilized Amount

50,000 – 30,000 = Rs. 20,000/-

Since the collateral margin is not reflected in the funds, the funds statement will show:

Margin required for the position – Cash Available (Opening Balance)

= 1,00,000 – 50,000

= (50,000)

NOTE: Delayed payment charges won’t be levied on this debit balance of Rs. 50,000.