Securities lending and borrowing (SLB) mechanism is very popular globally as it provides liquidity in the equity market which in turn increases the market efficiency.

(SLB) is a temporary lending of securities executed by a lender to a borrower of securities. It is a mechanism through which investors can borrow or lend shares to other market participants. As per SEBI rules, stocks can be borrowed for a maximum period of 12 months. Borrowers in SLB are usually short-sellers i.e. traders who want to sell shares that they don't own.

The platform provides a viable alternative to derivatives market for purposes of hedging Borrowers in SLB are usually short-sellers i.e. traders who want to sell shares that they don’t own.

SLB is a less risky option for short-sellers compared to the more complex options and futures contracts. In India, over 200 stocks are available on SLB platform for borrowing and some of the stocks that are not part of derivatives or that see thin volumes in futures market are available for borrowing on SLB.