ETF such as NiftyBees etc can be pledged using the same process like stocks
Could you please shed some light how to encash fractional units of LiquidBees?
We have taken your feedback about MF pledge and shared to the concerned team
Mutual funds like Liquid funds, constant maturity GILT funds or any other GOI/AAA/AA/A+ bond/NCD based Debt funds are very safe and when pledged for margin it acts as additional moat that earns interest along with facilitating Exchange's margin requirements for certain category of open positions, whereas, simple floating cash kept as margin to Exchange does not earn anything apart from the P&L determined from undertaken positions.
I am certain that if you succeed in facilitating/streamlining MF pledging, it shall bring good new business to you. Not only you'll earn additional revenue by distributing Mutual Funds but you would also attract HNI clients who tend to take overnight derivative positions. You see, a broker must not be always judged on how much leverage it gives.