Securities Lending & Borrowing (SLB)

Earn from lending or borrowing your idle securities

SLB is a legally approved medium for lending and borrowing of securities. Investors who have 'idle' shares can earn good returns if they lend stocks to traders who want to engage in reverse arbitrage or go plain short on stocks. The trend of lending stocks on the SLB platform is catching up among investors who have long-term stock portfolios. SLB is only allowed for Futures and Options stocks.

Benefits for Participants

SLB has benefits for both the parties Lender - Borrower.

For Lender

SLB provides an incremental return on an idle portfolio. So, if one is holding 1000 shares of xyz, which is to be held for long term; they could be lent whenever there is a demand. The lender gets lending fees, where in NSCCL is the guarantor.

For Borrower

A borrower is probably looking at one of these opportunities: arbitrage in stock price between 2 exchanges, reverse arbitrage when futures are at a discount to stock, to cover short position for avoiding settlement failure, mispricing in options, and other F&O arbitrage or hedging strategies which requires you to have stocks. Here, stocks could be borrowed from a lender for a fee using SLB.

Why SLB?



Increased Profit & Bonus to Lender

You can earn lending fee on your existing holdings. Also, Dividends/Bonus are transferred to Lender.


Increased Liquidity for Trader

If you’re borrowing securities, you’ll have increased liquidity, and can protect other investments and portfolio, esp. during a downturn.


Reduced Tax Liability

Lending does not incur short term capital gain tax.

How does it work?