Clear answers to the most common questions about MTF in India: how it works, what it costs, the rules, the risks, and how to read this dashboard. Current as of 2026.
MTF basics
What is MTF (Margin Trading Facility)?
MTF is a SEBI-regulated facility that lets you buy shares for delivery by paying only part of the value upfront, with your broker funding the rest. You pay interest on the funded amount, and the shares are held as collateral by pledge until you repay. It is sometimes called 'pay-later for stocks'.
What is the full form of MTF?
MTF stands for Margin Trading Facility.
Is MTF legal in India?
Yes. MTF is 100% legal and is regulated by SEBI. It is offered only by authorised brokers under defined guidelines covering margins, eligible stocks, pledging and risk control.
Is MTF the same as intraday trading?
No. Intraday (MIS) positions must be squared off the same day. MTF lets you carry a delivery position overnight and hold it for days, weeks or months, as long as you maintain margin and pay interest.
Can I hold MTF positions long term?
There is generally no fixed maximum holding period with most brokers, so you can hold as long as you maintain the required margin and pay the daily interest. Interest accrues every day, so very long holds can become expensive. Some brokers do impose a maximum tenure, so check your broker's terms.
How it works
How does MTF actually work, step by step?
You deposit an initial margin (cash or approved pledged securities); the broker funds the balance up to the regulatory limit; the purchased shares are pledged in a designated margin-funding demat account; and interest is charged daily on the funded amount from T+1 until you sell or repay.
How much margin do I need to pay?
The required margin is set per stock based on its risk (VaR + ELM, as in the cash segment), so it varies by stock rather than being a single flat number. A more volatile stock needs a higher margin and gives less leverage. Check the live requirement for each stock with your broker.
Do I own the shares bought under MTF?
Yes. You remain the owner. The shares are pledged to the broker as collateral, but dividends and corporate-action benefits accrue to you.
What happens to my pledged shares?
They are held in a separate demat account tagged as 'Client Securities under Margin Funding Account', by way of pledge only. The broker cannot use them to fund another client's trades.
When does interest start and stop?
Interest is typically charged from T+1 (the day after purchase) until the day you sell or repay the funded amount. It is calculated only on the funded portion and only for the days you hold.
Costs & interest
What is the MTF interest rate in India?
Across the industry, MTF interest rates range roughly from 9% to 18% per annum (about 0.025%-0.05% per day). The exact rate depends on the broker and sometimes on the borrowed amount. Compare current rates on our Brokers page.
How is MTF interest calculated?
Interest is charged daily on the funded amount only, for the number of days you hold. For example, Rs 75,000 funded at 14% p.a. for 30 days costs roughly Rs 863.
What other charges apply besides interest?
Brokerage (typically Rs 20 flat or 0.1%-0.3% per order), pledge/unpledge charges (about Rs 15-25 plus GST per scrip), and statutory charges such as STT, exchange transaction charges, stamp duty, GST and DP charges on sale.
Is MTF interest tax-deductible?
Generally no. MTF interest is treated as a financing cost and is usually not allowed as a direct deduction against capital gains. Consult a tax adviser for your specific situation.
Does a lower interest rate really matter?
On short holds the difference is small, but on longer holds it compounds. A 5-percentage-point difference in annual rate can meaningfully change your net return over several months.
Eligibility & stocks
Which stocks are eligible for MTF?
Only SEBI-approved Group I securities (the most liquid, stable stocks) and certain Group I ETFs are eligible. The exchange publishes and periodically updates this list, and your broker may apply a narrower list.
How many stocks can I buy on MTF?
It varies by broker, commonly from around 900 to 1,300+ eligible stocks. On the market as a whole, our daily dashboard typically shows around 2,100 securities actually funded under MTF.
What if a stock is removed from the MTF list?
If a stock is dropped from the approved list, the broker can square off your funded position in that stock.
Am I automatically eligible to use MTF?
No. You need an active demat and trading account, you must activate the MTF facility, accept the Rights & Obligations document, and maintain sufficient margin. The broker confirms your eligibility.
Risks & margin calls
What are the main risks of MTF?
Amplified losses (you can lose more than your initial margin), margin calls, forced liquidation if calls aren't met, interest drag on long holds, and square-offs if a stock leaves the eligible list.
What is a margin call in MTF?
Positions are marked to market every trading day. If the stock falls and your margin drops below the maintenance level, the broker issues a margin call asking you to add funds or collateral by a deadline.
What happens if I don't meet a margin call?
The broker has the right to liquidate (sell) your funded shares at the prevailing market price to recover the funded amount, potentially crystallising a significant loss.
Can I lose more than I invested with MTF?
Yes. Because the position is leveraged, a sharp fall can wipe out your margin and leave you owing more. This is why position sizing and buffer collateral matter.
Is MTF suitable for beginners?
Generally not. MTF involves leverage, interest costs and active risk management, which require experience. Beginners should understand these thoroughly, and ideally start without leverage, before using MTF.
MTF vs alternatives
MTF vs futures - what's the difference?
Futures expire, are limited to F&O stocks/indices, and don't give share ownership. MTF has no expiry, you own the (pledged) shares, you receive dividends, and you pay interest for the holding period instead of rolling contracts.
MTF vs intraday margin - which should I use?
Use intraday (MIS) only if you'll exit the same day; it has no overnight interest but forces same-day square-off. Use MTF to carry a delivery position overnight, accepting daily interest in exchange for the ability to hold.
Is MTF the same as a loan against shares?
No. A loan against shares (LAS) is a separate borrowing against existing holdings, with its own rates and tenor. MTF is built into the trading workflow specifically for buying eligible stocks on margin.
Using this site
What does the IndiaMTF daily dashboard show?
It shows the market-wide MTF book each trading day: total net outstanding funded value, fresh exposure and liquidation for the day, the top exposure scrips, the biggest day-on-day funding increases and decreases, new additions and full liquidations, and a searchable top-100 table.
Where does the data come from?
From NSE's daily margin trading disclosure, which is published publicly with a one-day lag. We convert the values from lakhs to crore and compute day-on-day comparisons.
How often is the dashboard updated?
Every trading day, after NSE publishes the file (around 7:30pm IST). The site refreshes shortly after. Data is available for trading days only, not weekends or exchange holidays.
Is this investment advice?
No. IndiaMTF.com is for information only and is not investment advice. We are not a SEBI-registered intermediary or adviser. Always verify figures independently and consult a SEBI-registered adviser before investing.
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Disclaimer. These answers are educational and for information only - not investment advice. MTF is leveraged and can amplify losses. Rules, margins and rates change; verify current details with your broker and SEBI/exchange circulars. IndiaMTF.com is not a SEBI-registered intermediary or adviser. Consult a SEBI-registered investment adviser before investing.
