An overdraft account will be set up with IIFL Finance Ltd. This account will have a certain drawing limit, which you can utilize as and when required. Drawing limit depends upon the quality and quantity of the security units pledged by you.
As per RBI norms, a minimum 50% margin must be maintained on equity shares and mutual funds, For other types of collateral, margins range from 10% to 35%.
If the market value drops to a level where the minimum margin is less than stipulated, the borrower must recoup the margin by pledge of additional shares or by cash margin/ part-repayment.