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I am very surprised when I read that one needs to keep at-least 10% cash collateral for any pledging of shares. Interestingly for most other brokers, this goes to as high as 50%.
I use ICICI Direct and have been using shares as margin for FnO trading regularly. I do not need to maintain a penny in cash, I can go 100% shares only as margin. Secondly, the haircut on most blue chips is only 15%, this is far higher for most other brokers. Third, there is no interest to be paid whatsoever on the pledged money. Finally, transferring the shares in and out of demat for pledging/un-pledging incurs no costs and can be done infinite times seamlessly - again it looks like many eg Rs 60/- by Zerodha). Many say that icicidirect charges hefty brokerages but there are prepaid schemes available which can be quite competitive. Given all the above advantages, I still won''t mind paying somewhat higher brokerage charges as all of these features amply compensates in generating a better income out of the margin money.
Note: I am not in any way associated with Icicidirect, but am just pretty happy with them :) Also, I have not tried others per se, but most of these features do put me off from doing so.

It is SEBI mandate to charge 50% margin in cash and the rest could be in stock collateral pledged in favor of the broker. In case your broker allows you only 10% to hold cash that means they are funding the remaining 40% for which they will charge interest.
Problem with full service brokers is that they do not differentiate between margin from pledging and loan against shares which means they charge you interest (@0.05% per day = 18% p.a) once you drawdown on the trading limits provided after pledging. On the other hand discount brokers have only pledging facility and not loan against shares which means they take your shares as collateral and give you margin (not cash) and so there is no interest charge. Zerodha charges Rs. 60 per pledge but then you do not pledge and depledge 10 times a day for fun. The 20 per trade (unlike brokerage on turnover) way outclasses the hidden charges loaded services provided by full service brokers such as ICICI. I agree that for prepaid the brokerage is low but they kill you in the interest on margin taken against shares while it is free in discount brokers.

Hi, Are you surevICICi is not charging interest , have you checked the debit/ credit details ?