What happens when a stock falls below rs.1 on the NSE? This Might be the Penalty which applies for that!


What happens when a stock falls below rs.1 on the NSE? This will  Penalty for that!

As Per Our Knowledge NSE Penal Charges are as below:


A penal charge are going to be levied on the quantity in default as per the byelaws concerning failure to satisfy obligations by any Clearing Member.


Type of Default

Penalty Charge per day

Chargeable to

Overnight settlement shortage of value more than Rs.5 lakhs


Clearing Member

Security deposit shortage


Clearing Member

Shortage of Capital cushion


Clearing Members


Violations if any by the custodial participants shall be treated in line with those by the trading member and accordingly action shall be initiated against the concerned clearing member.


Short Reporting of Margins in Client Margin Reporting Files


The following penalty shall be levied just in case of short reporting by trading/clearing member per instance.

The following penal charges are levied for failure to pay funds/ settlement obligations:

Short collection for each client

Penalty percentage

(< Rs 1 lakh) And (< 10% of applicable margin)


(= Rs 1 lakh) Or (= 10% of applicable margin)



If short/non-collection of margins for a client continues for quite 3 consecutive days, then penalty of fifty of the shortfall amount shall be levied for every day of continued shortfall beyond the 3rd day of shortfall.

If short/non-collection of margins for a client takes place for quite 5 days during a month, then penalty of fifty of the shortfall amount shall be levied for every day, during the month, beyond the 5th day of shortfall.

Notwithstanding the above, if short collection of margin from clients is caused thanks to movement of three or more within the Nifty 50 (close to close) on a given day, (day T), then, the penalty for brief collection shall be imposed as long as the shortfall continues to T+2 day.

All instances of non-reporting are treated as 100% short reporting for the aim of levy of penalty.


Penalty and penal charges for margin/limit violation

Penalty for margin / limit violation is levied on a monthly basis Supported slabs as mentioned below or such other amount as specified by the Clearing Corporation from time to time.

Instances of Disablement

Penalty to be levied

1st instance

0.07% per day

2nd to 5th instance of disablement

0.07% per day + Rs.5,000/- per instance from 2nd to 5th instance

6th to 10th instance of disablement

0.07% per day + Rs.20,000/- ( for 2nd to 5th instance) + Rs.10000/- per instance from 6th to 10th instance

11th instance onwards

0.07% per day + Rs.70,000/- ( for 2nd to 10th instance) + Rs.10,000/- per instance from 11th instance onwards.
Additionally, the member will be referred to the Disciplinary Action Committee for suitable action.



Instances as mentioned above ask all disablements during market hours during a month . The penal charge of 0.07% per day is applicable on all disablements thanks to margin violation anytime during the day.


FII/Mutual Fund position limit violation

In case of violation of FII/Mutual Fund limits a penalty of Rs. 5,000/- would be levied for every instance of violation.


Client wise/NRI/sub account of FII/scheme of MF position limit violation

In case of open position of any Client/NRI/sub-account of FII/scheme of MF exceeding the required limit following penalty would be charged on the clearing member for every day of violation:

1% of the worth of the number in violation (i.e., excess quantity over the allowed quantity, valued at the price of the safety within the normal market of the Capital Market segment of the Exchange) per client or

Rs.1,00,000 per client, whichever is lower, subject to a minimum penalty of Rs.5,000/- per violation / per client.

When the client level/NRI/sub-account of FII/scheme of open-end fund violation is on account of open position exceeding 5% of the open interest, a penalty of Rs.5000 per instance would be levied to the clearing member.


Marketwide Position Limit violation

At the top of every day during which the ban on fresh positions is effective for any security, when any member or client has increased his existing positions or has created a replacement position therein security the client/trading members are going to be subject to a penalty 1% of the worth of increased position subject to a minimum of Rs.5000 and maximum of Rs.100000. The positions, for this purpose, are going to be valued at the underlying close price.

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