SLBM Services in India
Earn from Your Idle Shares
Most long-term investors have quality stocks sitting idle in their Demat account, doing nothing beyond buying and selling. Through Fortune Wealth’s SLBM service, those idle holdings can generate a regular lending income on NSE’s exchange platform — without selling a single share, and without taking on any additional market risk.
SLBM (Securities Lending and Borrowing Mechanism) is a SEBI-regulated framework that lets equity investors lend their shares to traders and institutions for a fee, with exchange-guaranteed settlement by NSE Clearing Ltd. Fortune Wealth sets up, manages, and monitors this service for clients through the Motilal Oswal platform — the same platform through which clients access our full range of equity investment services.
If you hold Nifty 50 or F&O eligible stocks and plan to stay invested for the long term, SLBM is one of the simplest income additions available to your portfolio. Our team identifies which of your stocks are eligible, checks current lending rates, and handles the entire setup process.
What Our SLBM Service Covers
Fortune Wealth handles the complete SLBM process on your behalf through the Motilal Oswal platform. Here is exactly what is included:
- Holdings audit — we review your Demat holdings and identify which stocks are NSE SLBM-eligible (F&O stocks, select NSE 200 constituents, approved ETFs)
- Rate check — we track current lending rates on the NSE SLBM platform and identify which of your stocks command the best returns
- Order placement — our team places lend orders on the NSE SLBM system on your behalf, specifying the right quantity, tenure, and minimum acceptable rate
- Income monitoring — lending fees are credited to your ledger by end of day and available for withdrawal from the next trading day
- Renewal management — as contracts expire on the first Thursday of each month, we manage renewals so your income stream continues without interruption
- Reporting — clear monthly records of lending income earned, tenure details, and shares returned, for accurate tax filing
How SLBM Works
The mechanics are straightforward. You own shares. A trader or institution needs those shares temporarily for short selling, arbitrage, or settlement purposes. They borrow your shares via the NSE lending platform, pay a lending fee, and return your exact shares at the end of the agreed period. NSE Clearing Ltd. guarantees every transaction.
| Your Role as Lender | What Actually Happens |
|---|---|
| You own shares long term | Quality equity holdings sit idle in your Demat between your buy and eventual sell date |
| You lend through NSE SLBM | Your broker lists your shares on the NSE lending platform at your specified rate and tenure |
| Borrower pays a fee | A trader or institution borrows your shares and deposits 125% of their value as collateral |
| You continue earning | Lending fee is credited to your account. Dividends and corporate actions still credited to you |
| Shares are returned | At contract expiry, your exact shares are returned to your Demat |
| You keep your upside | Any appreciation in your shares during the lending period remains fully yours |
How Much Can You Earn
Lending fees vary by stock and market conditions. Stocks with high short-selling interest command the strongest rates.
Example: Lending 500 Shares of a Large Cap Stock
You hold: 500 shares at Rs 2,000 per share (portfolio value: Rs 10,00,000)
Lending fee rate on NSE SLBM: 3% per annum (varies by stock and demand)
Monthly income: 500 × Rs 2,000 × 3% / 12 = Rs 2,500 per month
Annual Lending Income: Rs 30,000 per year
You earn Rs 30,000 without selling, without taking any new market risk
Note: Lending fee rates vary with market demand for each stock and the tenure chosen. Actual returns depend on the specific security and prevailing SLB rates on NSE at the time of execution. For larger portfolios (Rs 50 Lakh or above in eligible stocks), SLBM income can reach Rs 1 to 5 Lakh per year depending on the stock mix and prevailing rates.
Key Facts About SLBM
| Feature | Details |
|---|---|
| Regulator | SEBI regulated. Framework established May 1997. Fully legal and supervised |
| Exchange Platform | NSE India’s SLBM is exchange-traded, unlike most global markets where securities lending is OTC (bilateral/private). This means every transaction carries exchange guarantee |
| Settlement Guarantee | NSE Clearing Ltd (NCL) is the central counterparty for every SLBM transaction. Zero counterparty risk for the lender |
| Eligible Securities | All F&O eligible stocks, select NSE 200 constituents, and approved ETFs. List updated on the 28th of each month by NCL. Nifty 50 and Nifty Next 50 stocks are almost always available |
| Contract Expiry | Monthly expiry on the first Thursday. You can lend for 1 month up to 12 months |
| Lending Fee | Variable, set by market supply and demand. Typically 0.5% to 10% per annum. Higher for stocks with strong short-selling interest |
| Borrower Collateral | Borrower deposits 125% of the stock’s market value. Mark-to-market margin collected daily. Lender’s position is fully protected |
| Dividends | All dividends and corporate actions (bonus shares, rights issues, stock splits) credited to you as lender, not to the borrower |
| Voting Rights | Suspended during lending period. Voting rights transfer temporarily to the borrower |
| STT and SEBI Fees | No Securities Transaction Tax on SLBM transactions. No SEBI turnover fee — cost-efficient for the lender |
| Early Recall | You can request your shares back before contract expiry if your plans change |
| Tax on Income | Lending fee is treated as business income and taxed at your applicable slab rate |
Why India’s SLBM Is Safer Than Most Countries
In most global markets, securities lending is an OTC (over-the-counter) arrangement between two parties. If the borrower defaults, the lender is exposed. India’s SLBM works differently.
Because every SLBM transaction on NSE is exchange-traded and settled by NSE Clearing Ltd., the exchange is the central counterparty on both sides. If a borrower defaults, NCL conducts a buy-in auction to return your shares. If shares cannot be sourced, NCL pays the market equivalent plus a premium. The 125% collateral margin from the borrower funds this process. In practice, the exchange guarantee means lenders have full settlement protection regardless of what happens on the borrower’s side.
Who Should Consider This Service
SLBM is most suitable for
- Long-term buy-and-hold equity investors who own quality F&O eligible stocks and hold them for 3 years or more
- Investors with large Demat portfolios of Rs 25 Lakh and above, where SLBM income becomes meaningfully significant
- HNI investors whose portfolios carry heavy weightings in Nifty 50 or Nifty Next 50 stocks that command consistent SLBM demand
- Income-focused investors looking for a supplementary income stream from an existing portfolio without selling holdings or reducing equity exposure
- Clients already using our equity investment or model portfolio service who want their holdings to work harder between review periods
SLBM may not suit you if
- You may need to sell your shares at short notice; lent shares cannot be sold until returned. Early recall is possible but takes time to process
- Voting rights matter to you for a specific company holding; voting rights are suspended during the lending period
- Your shares are not on the current NSE SLBM eligible list — our team checks your specific eligibility before setup
How to Get Started with SLBM Through Fortune Wealth
Call, WhatsApp, or fill our consultation form. Tell us what you hold and we will run the eligibility check.
We review your Demat portfolio against the current NSE SLBM eligible list and check lending fee rates for your specific stocks.
Your Demat must be with or linked to Motilal Oswal to access SLBM through our platform. If not, we help you set up through our equity onboarding process.
We place the lend order on NSE SLBM with your preferred tenure and minimum rate. Once matched with a borrower, the transaction confirms and income begins.
Lending fee is credited to your ledger by end of day and available for withdrawal from the next trading day.
We track your contracts, manage renewals, and alert you to any changes in eligibility status or rate movements for your holdings.
Why Use Fortune Wealth for SLBM?
What We Bring to This Service
Motilal Oswal platform access one of India’s most active SLBM desks with broad coverage of eligible stocks and competitive rate matching
We do the work from eligibility checks and rate monitoring to order placement and contract renewals. You earn without managing the process
Portfolio-level thinking SLBM is set up only where it fits your overall equity plan. We do not lend holdings that you may need to access soon
Integrated service SLBM sits within our broader equity service. Clients using our model portfolio or direct equity service can add SLBM as a complementary income layer on the same account
Transparent records monthly income statements and clear documentation for your chartered accountant at tax time
SEBI compliant all transactions through NSE’s regulated framework, no off-exchange or private arrangements
FAQ
Frequently Asked Questions — SLBM India
SLBM (Securities Lending and Borrowing Mechanism) is a SEBI-regulated system on NSE that lets long-term investors lend idle equity shares to traders or institutions for a fee. The borrower deposits collateral, you lend your shares for a fixed tenure, and NSE Clearing Ltd. guarantees the return of your exact shares at the end of the agreed period. You earn income without selling anything.
Lending fee rates vary by stock and demand, typically ranging from 0.5% to 10% per annum. A Rs 10 Lakh portfolio in eligible stocks earning an average 3% per annum generates approximately Rs 30,000 per year in income. For portfolios of Rs 50 Lakh and above, SLBM income can reach Rs 1 to 5 Lakh per year. Our team checks current rates for your specific holdings before setup.
Yes. Three layers of protection apply: the borrower deposits 125% of the share value as collateral, mark-to-market margins are collected daily, and NSE Clearing Ltd. settlement is exchange-guaranteed. Even if a borrower defaults, NCL runs a buy-in auction to make sure lenders get their shares (or equivalent value) back — a level of protection most global OTC securities lending markets don’t offer.
Yes. Dividends, bonus shares, rights issues, and all corporate benefits are credited to you as the lender throughout the lending period. Your voting rights, however, are temporarily suspended and transfer to the borrower for the duration of the contract.
All F&O eligible stocks, select NSE 200 constituents, and approved ETFs are eligible. The list is maintained by NSE Clearing Ltd. and updated on the 28th of each month. Nifty 50 and Nifty Next 50 stocks are almost always on the eligible list. Our team checks your specific stocks against the current list before setup.
No. Once lent, your shares are held for the duration of the contract and cannot be sold. You can request an early recall, which triggers a return process, but this takes time. We always recommend lending only the portion of your holdings you are confident you will not need to sell during the lending period — this is part of the portfolio review we do before placing any lend order.
Lending fee income from SLBM is classified as business income under the Income Tax Act, not capital gains or dividend income. It is taxed at your applicable income tax slab rate (20% or 30% for most HNI investors). Consult your chartered accountant for personalised guidance on how SLBM income fits with your overall tax plan.
SLBM contracts expire on the first Thursday of the chosen tenure month. At expiry, NSE Clearing Ltd. automatically returns your shares to your Demat account. Our team manages the renewal process for clients who wish to continue lending into the next contract month, maintaining continuous income without any action required on your end.
Yes, they serve different purposes. Pledging sends shares to a broker or lender to release margin for trading, and generates no lending income. SLBM lends your shares to another market participant purely to generate income. Both use your existing holdings as the underlying asset, but the objective and mechanics are different.
Yes, and this is exactly how most of our clients use it. If you are already invested through our model portfolio or direct equity service, SLBM runs on the same Demat account and adds a lending income layer on your existing shares, without requiring any additional trading or capital.
Start Earning from Your Idle Shares
Contact the Fortune Wealth team. We check your holdings, confirm eligible stocks, and set up your SLBM lending.
No obligation
SEBI regulated
25+ years experience
Disclaimer: Securities Lending and Borrowing (SLBM) is regulated by SEBI, and transactions are guaranteed by NSE Clearing Ltd. (NCL). Lending income from SLBM depends on prevailing market rates and may vary based on stock eligibility criteria and lending demand. Shares lent through SLBM cannot be sold or traded during the lending period. All transactions are executed through NSE’s regulated SLBM mechanism via Motilal Oswal. Investors are advised to review eligibility criteria and lending terms carefully before commencing SLBM lending activity.
