How common is getting penalty for BTST?

General
1

First of all I am not sure why does it takes 2 days for stocks to get delivered in demat? Is it really hard to do this operationally so that the stocks get delivered in demat atleast the very next day if not instantly?

Or is it some sort of risk measure to avoid short delivery of stocks? Other major exchanges like NYSE or TYO or any other major excahnges handle this the same way or only we are living in baba adam era?

Also how common is to get penalized for short delivery due to BTST?

@siva-reddy since zerodha is largest indian discount broker do we have any statistics for this?

2

India has been following T+2 settlement cycle since April 2003. UK adopted T+2 settlement cycle in October 2014. US adopted T+2 settlement cycle in September 2017. Japan shifted to T+2 settlement cycle in July 2019. SEBI was considering shifting to the T+1 cycle but decision about it was deferred.

3

Why does it takes two days to settle? If the exchange knows the buyer and seller has traded the shares for delivery shouldn’t it be done at EOD?

4

That is explained in detail on this thread - In an online world where everything is instant, why does stock settlement still take 2 days?

I agree with you that the End of Day (EOD) settlement is likely the future. Some exchanges in China have been following the T+0 settlement cycle for past few years.