Dividend credit

Can you explain how the dividend is payed out. Does it get credited to the FUNDS or does it credited to the bank account?

Dividend is credited to your Primary Bank Account. Though, if you have sold your shares on ex-date, in such case Dividend is received by the broker and it will be credited to your trading account.

@ShubhS9 Is it only the case that if you sell the shares on the ex-date that the dividend is credited to the broker, or if you sell the shares on any date prior to the payment date on or after the ex-date?

This is only in case of ex-date, if you sell anytime after ex-date or record date, dividend will be credited to your primary bank account.

One more question. Does the stock price go down also on the dividend payout date?

No, stock price corrects to the extent of dividend issued on ex-dividend date, on dividend pay-out date there is no change as shares are already trading ex-dividend.