Are you looking for ways to earn from your idle portfolio? You may be thinking of dividends, but there's another option: securities lending and borrowing. This mechanism allows you to lend your shares to those who need them.

But who needs shares? There are several situations where people may need to borrow shares. For example,

  • To avoid Auction : investors can borrow shares through SLBM to avoid hefty auction penalties.
  • Short Selling : Short sellers can borrow shares to engage in short selling, a strategy to profit in bearish markets.
  • Reverse Arbitrage : Reverse arbitrage traders can borrow shares to execute a strategy where they buy futures and sell stocks to earn a risk-free profit from the difference in spot and futures prices. Later on they can buy back stocks from the market and deliver to SLBM for final settlement.


"When engaging in securities lending and borrowing (SLBM), it's important to know what to quote. If you're a lender, you'll quote a lending fee, and if you're a borrower, you'll quote a borrowing fee. The lending fee is similar to an interest charge for the use of your shares for a specific period.
It's also important to consider what happens if a dividend is declared after you've lent your shares. In the SLBM segment, all benefits, such as dividends and bonuses, remain with the original investor.
SLBM contracts are available for a maximum of 12 months.
If a borrower does not return your shares, the exchange clearing corporation will take responsibility for the settlement guarantee of each trade.
It's worth noting that only a limited number of stocks are available for lending or borrowing through SLBM. You can refer to exchange circulars to stay updated on the list of available stocks."