What It Means
A Margin Shortfall Penalty is a charge levied when the margin actually collected for a position falls short of what the exchange requires — calculated as a percentage of the shortfall amount, and escalating the longer or more often it happens.
How It Works
Smaller, occasional shortfalls are charged at modest slab-based rates, but a shortfall that continues beyond 3 consecutive days, or recurs more than 5 times within a month, jumps to a flat 5% of the shortfall amount per day it persists — a steep escalation designed to discourage chronic under-margining rather than punish a genuine one-off. GST at 18% applies on top of whatever penalty is charged.
Warning
A small margin shortfall feels harmless in isolation, but repeated small shortfalls compound quickly once you cross the multi-day or multi-instance thresholds that trigger the escalated rate.