There are two major stock exchanges in India, viz. National Stock Exchange (NSE) and Bombay Stock Exchange (BSE). Recently BSE has revised its transaction charges in August 2018 for cash segment. This article details the changes in BSE transaction charge.Article Content
Stock market has a direct impact on a country’s economical growth. However, there are several factors which affect the stock market as well.
A stock exchange is the core organism of the stock market ecosystem. It brings fresh air to the eco-system in the form of new companies and forces the registered companies to exit, if they violate any exchange rule.
Securities and Exchange Board of India (SEBI) is the regulator of the Indian stock market which includes stock exchanges, brokers and financial intermediaries. SEBI achieves its goal of bringing transparency in the market by introducing and applying the bye-laws through 20 departments of SEBI. In fact several regional stock exchanges exited the bourse business because they were not able to follow the strict guidelines of SEBI.
Currently there are 6 active stock exchanges in India, viz.
- BSE Ltd.
- Calcutta Stock Exchange Ltd.
- India International Exchange (India INX)
- Metropolitan Stock Exchange of India Ltd.
- National Stock Exchange of India Ltd.
- NSE IFSC Ltd.
Of the above, NSE and BSE are the two main stock exchanges. Stock exchanges are private organizations thus profit making is their main objective. Being rivals, NSE and BSE give close competition to each other.
A quick look at BSE & NSE
BSE is the oldest stock exchange in India while NSE has started operations quite recently. BSE also claims to be the fastest exchange in the world with speed of 6 microseconds.
There has always been a dilemma among traders whether to choose BSE or NSE. This confusion exists because there is no significant price difference for a scrip, between the two exchanges. This minimal price difference is due to the arbitrage process.⇯
In February 2018, FundsBase published two articles, to give a clarity to its readers, regarding the choice of exchange.
- NSE or BSE which is better?
- Why NSE is more popular than BSE?
This article starts by digging down the surface to highlight three main reasons, which a trader should keep in mind before making his choice for exchange. As a result, one of the two exchanges won. In this article, FundsBase recommended NSE, to its readers. Read the article NSE or BSE which is better.⇯
Later, I became more inclined to find out the reasons that started the dominance of NSE in Indian stock market.
Yes, I did find them and listed in my second article detailing why NSE is more popular than NSE?
One of the common reasons in the above two articles was the different transaction charge being levied by the stock exchanges. In case, you are not aware of the charges you pay, it is recommended to read the stock market charges in India first.⇯
BSE Transaction Charges Changed
BSE has adopted a new transaction charge mechanism. This new charge is being levied monthly, after calculating the monthly turnover. This new BSE transaction charge mechanism is as below
|Monthly Turnover in Rs. Crs in calendar month||Rate (in Rs.) per Crore on incremental turnover|
|Above 750 upto 1500||290|
|Above 1500 Upto 2500||280|
|Above 2500 upto 5000||270|
|Above 5000 upto 7500||260|
How to see this new BSE transaction charge?
BSE transaction charges will be levied at the end of the month after calculating the total turnover at the BSE exchange.
If your total turnover at the end of the month is below 750 crore, you will be charged ₹300 per crore.
e.g. up to ₹1 crore – ₹300
for ₹1 crore to ₹2 crore – ₹600 and so on up to ₹750 crore.
If your total turnover at the end of the month is more than ₹750 crore but below ₹1500 crore, you will be charged ₹290 per crore.
e.g. ₹750 to ₹751 crore – ₹290
for ₹751 to ₹752 crore – ₹580 and so on up to ₹1500 crore.
If your total turnover at the end of the month is more than ₹1500 crore but below ₹2500 crore, you will be charged ₹280 per crore.
e.g. ₹1500 to ₹1501 crore – ₹280
₹1501 to ₹1502 crore – ₹560 and so on up to ₹2500 crore.
If your total turnover at the end of the month is more than ₹2500 crore but below ₹5000 crore, you will be charged ₹270 per crore.
e.g. ₹2500 to ₹2501 crore – ₹270
₹2501 to ₹2502 crore – ₹540 and so on up to ₹5000 crore.
If your total turnover at the end of the month is more than ₹5000 crore but below ₹7500 crore, you will be charged ₹260 per crore.
e.g. ₹5000 to ₹5001 crore – ₹260
₹5001 to ₹5002 crore – ₹520 and so on up to ₹7500 crore.
If your total turnover at the end of the month is more than ₹7500 crore , you will be charged ₹250 per crore.
e.g. ₹7500 to ₹7501 crore – ₹250
₹7501 to ₹7502 crore – ₹500
Current transaction charge comparison NSE vs BSE
The same question still comes to the mind. Whether you should choose NSE or BSE for your trades. Let’s have a comparison of the current transaction charges against the turnover at the end of the month, for both NSE and BSE.
|Monthly turnover in ₹||NSE||BSE|
|100000 (1 lakh)||3.25||300|
|1000000 (10 lakh)||32.5||300|
|5000000 (50 lakh)||162.5||300|
|8000000 (80 lakh)||260||300|
|9000000 (90 lakh)||292||300|
|10000000 (1 crore)||325||300|
|100000000 (10 crore)||3250||3000|
|1000000000 (100 crore)||32500||30000|
|7000000000 (700 crore)||227500||210000|
|7500000000 (750 crore)||243750||225000|
BSE and NSE are the two main rival stock exchanges in India. Previously, the transaction charge of BSE was ₹1.5 per trade. This time, BSE has focussed to attract rich traders by decreasing the transaction charges for them. However, a retail trader has to pay much more than he was paying previously.
So now, NSE has become even more favorite for the retail traders, who have monthly turnover up to ₹1 crore.
To see if market is open today read Stock Market Holiday for year 2019