InvestorQ : What are the pledge charges in loan against securities (LAS)?
varsha Motwani made post

What are the pledge charges in loan against securities (LAS)?

Answer
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Deepali Khupte answered.
2 years ago


Let’s first understand what pledging and pledge charges are.

Pledging of shares refers to the practice of using equity shares as collateral against loans. Once a pledge is created, it acts a lien and the pledgee has the right to recover all his/her dues against the pledge first before releasing the pledge i.e. unpledging the shares.

In case of a default by the borrower, the pledge can be invoked for the recovery of these dues.

Pledge charges are the charges levied by depository participants (DPs) for the service of pledging shared. Pledge charges are debited from a borrower’s account on successful pledging of shares. Pledge charges vary from DP to DP. However, the common charge is 0.04% of the pledge amount.