Not instant withdrawal but same day payout, can check the thread from start.
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@siva, compulsery we need instant withdraw facility needed ,we will withdraw our money from indian stock market anytime soon because SEBI is increasing margin day by day ,its not afford to trade without ROI we are forced to move to US market to trade from dubai , Dubai is free trade country , recently i seen in hindu news paper even the cash segment they increase margin for intraday , SEBI is telling to invest in Mutual fund what a bullshut is this , you ZERODHA cannot explain to SEBI , show he thred to them
Institutional investors who treat equity trades as business transactions, like foreign portfolio investors and mutual funds have been exempted from this rule.
“SEBI is telling retail investors to go to mutual funds; direct trading is only for institutional players. One rule for the retail investor and another for institutional investors and foreign portfolio investors does not ensure a level playing field,” a practitioner of SEBI law for over two decades told BusinessLine .
SEBI’s new margin norms, a major entry, exit barrier for retail investors in stock market’
PALAK SHAH Mumbai | Updated on December 16, 2019 Published on December 16, 2019
Experts say SEBI’s new norms are like a pre-paid equity account for retail investors
SEBI’s new guidelines on margin requirement, even for ‘selling of shares,’ will act as a major entry and exit barrier for the retail investor, say experts. The new rule will cause chaos in the share delivery system, which works on the issuance of demat delivery instruction slips, and is largely physical and not digital, they told BusinessLine .
According to experts, maintaining a margin deposit with brokers for merely selling shares, is unheard of globally and could encourage fraud by brokers.
1.5-2.5 per cent margin
SEBI has directed stock brokers to collect an initial margin of between 15-25 per cent, even for simple buying and selling of shares, in the cash segment. So, if a retail investor wants to ‘simply sell shares’ worth Rs 10 lakh, he/she may require to keep between Rs 1.5 lakh to Rs 2.5 lakh as margin deposit with the broker. Alternatively, the investor should maintain a demat account with the broker he or she is trading with so that the broker mark shares for early pay-in. But for safety purposes, most retail investors keep their trading and demat accounts with separate entities so that the brokers do not take undue advantage of shares in their custody. This safety net will now have to be sacrificed. Also, most retail investors transact in the cash market via multiple brokers to cut risk, but they will now be forced to deal with a single entity due to tight margin requirements.
@siva @nithin what is the logic behind processing payin and facilitating Withdrawal only the next day? What hinders withdrawal the very same day at the EOD? What is the process involved? Will Zerodha ever considering improving this system?
I don’t know if you know it, but all payment gateways settle on T+1 day basis with the merchant. So if you transfer funds and buy stocks today, you are actually using our funds (Zerodha’s) for this. The payment gateway settles your fund to us only the next day. So yeah, if you transfer and withdraw, there is an issue.
Also all fund transfers made into the system is reconciled by our audit team. If we send out funds without reconciling, the business takes a risk as funds once transferred in can’t really be gotten back.
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@nithin is it true for IMPS and UPI fund transfer as well? IMPS and UPI mean instant money transfer, no? With now 24x7 NEFT, does the settlement delay still hold true?
Moreover, why does an investor have to wait for 2 days to withdraw the funds to his bank account after say the redemption amount is credited to the Zerodha trading account. Point #2 below:
As I have mentioned in a previous thread, isn’t this waiting period of 2 days a disadvantage of investing MF through Zerodha Coin when compared to MF investment in non-Demat mode?
https://tradingqna.com/t/will-24x7-neft-make-mf-redemption-any-faster/
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This applies when you receive credit for selling Equity shares. We follow ‘T’ day billing pattern, which means the day you’ve sold stocks, is the day you will receive a credit to your ledger. The settlement of this happens on T+2 from the Exchange, which means we receive credit for this only on T+2, which is why you can withdraw only on T+2.
Mutual fund credits can be withdrawn the same day, because we credit the ledger on the day we receive it from the Clearing corporation (on the settlement day).
Do fund transfer by means of upi also takes T+1 day for settlement since it’s based on IMPS tech? Therefore it must be immediately be sent in broker’s account. If so then if I do intraday day trades and close all my positions, shouldn’t the remaining Payin amount(after deducting all charges and adjusted for losses if applicable) be available for withdrawal at end of the day?
In case of UPI and IMPS, the settlement of funds happen to us on same day. With PG it takes the next day. 60% of all our transactions (by value) is through PG.
And like Venu said, when you sell shares, the credit happens only on T+2.
Like I have also mentioned, before we send out funds we require time to reconcile and ensure the person withdrawing has sufficient funds in the trading account and the person who is withdrawing is the same person who transferred in. This takes time. But we are working on instant fund withdrawals, where atleast for certain amount you will be able to withdraw the same day.
Thanks for the info @nithin
- With 24x7 NEFT, shouldn’t the “working day” clause change in point #1
- Long back I had suggested a feature - instant withdrawal of MF redemption value as a loan, and charging loan interest for those T+X days. It would help an investor get instant money, also Zerodha would generate revenue, a win-win for both.
Once AMC credits the redemption value to Zerodha trading account, the loan is automatically recovered from the trading account (so the loan is a secured loan indeed) and in the monthly statement, loan interest amount for those T+X days is charged to the user.
E.g. say today before 1:30 pm I redeem equity MF worth Rs 50,000. I can immediately get a margin to invest in another MF or I can also withdraw it to my bank account without waiting for T+X days. At the cost of paying loan interest to Zerodha until AMC credits the amount in my trading account.
I would like to know your thoughts on this. I have given an example of MF redemption, though it can be applied to the sale of equity share too.
And Zerodha can charge interest beforehand or allow ~99.5% of the fund withdrawal. This will allow traders (who don’t mind paying interest on fund withdrawn for 2 days) to withdraw money fast. And generate risk free money for brokers. Ofcourse only if SEBI allows this type of transaction.
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Yep, but our bank is still not live on it yet. We will change it as soon as HDFC starts 24x7
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Not allowed currently.
Hi, looking forward for this feature, I want to use it for keeping a portion of my Emergency funds invested in Liquid funds & to be able to withdraw instantly. Any expected timeline for the rollout.
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Dear small investors these people said same day withdrawal will be enabled from dec 16 2019… Now they are saying some non sense… Be smart don’t be fooled open an HDFC Account immediately and link it… they won’t do it any sooner because its a huge profit for zerodha ( they are holding our money for nearly 8 to 10 days )…if they really want to help customers they would have used IMPS feature long back…but this is business that’s how it will…be smart and open HDFC account (if u don’t have one)…if you note carefully zerodha will discourage customer from opening HDFC account… don’t ask them just open and link…let them do their same day withdrawal drama
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in HDFC website its already mention NEFT24*7 is live , then what happen to zerodha ,
@siva why still not available this feauture , already HDFC is live in this feature
when you will come to instant credit , RBI rules are same for everybody then how zerodha is still not enabled in this feature
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C2C transactions are enabled for 24x7
But, B2C transactions are not done yet for 24x7
Individual to individual transactions are allowed for now but not at corporate level. We will allow this once HDFC enabled it at business level.
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@siva waiting for this feature still not yet , any timeline to enable 24*7 funds withdrawl from zerodha
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Likely in next 2 to 3 weeks.
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Any update on this feature, with interest rates falling, Liquid/Debt fund with option to withdraw upto certain limit instantly with this feature will be really helpful for many investors.
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