I will create a detailed post explaining this. @Meher_Smaran maybe create another question on Tradingqna and tag me there. Keep it unlisted, I will answer and list it.
But the gist
If you transfer funds using a payment gateway, the broker doesn’t get it the same day; it is usually the next day. So while you get money to trade instantly, the money isn’t with the broker. So allowing withdrawal is an issue.
Fund withdrawal is the riskiest part of the broking business. A wrong withdrawal, and there is no way to get back the funds. Hence, most brokers have reconciliation systems built in to determine whether customers withdrawing funds have their own clear funds. Also, when withdrawal happens, the money has to be reduced from the risk management systems, which is also slightly risky. But that said, this risk is large when the requested funds are large. We are working on instant withdrawal for smaller amounts of money, to begin with, up to Rs 25k.
There are a few other reasons, I will try to create a post on this soon.
@nithin 3 questions that is in the best interest of both Zerodha and any customer
Considering sebi rule implemented on Oct7 2022 - If I sell shares worth 50k and buy shares worth 50k on Oct - do I have to load funds for 50k.SInce what I sold on Friday (Oct 7) will take T+2 to get settled.
Will there be any fine if I wait for T+2 days without loading funds? ask I sold for 50k and bought for 50k
If I do fund transfer of 50k using net banking tomorrow - I can start using the funds from T+1?
If you sell shares worth Rs 50k, the platform will allow you to buy only up to Rs 40k. A 20% margin gets blocked for the sell transaction until the shares are delivered.
If you buy Rs 40k worth of stocks without the funds being realized, the broker’s capital will get used for this. If a broker doesn’t have deep enough pockets based on the size of the business, the broker may not allow new purchases until T+2, when funds are settled.
At Zerodha, for the top 5 banks, we have built the gateway ourselves, so the funds get settled immediately to us. Since we get funds instantly, you can use them instantly.
For all the banks, we don’t have the gateway built ourselves; we use a 3rd party payment gateway, and they will settle the funds on T+1. If you transfer Rs 50k on Monday, we will receive it on Tuesday. If you use the funds on Monday to trade, the broker needs to have deep enough pockets as his own capital will get blocked for this trade. Since we are sufficiently capitalized and for almost over 80% of transactions, we have our own gateway, our customers will be able to trade instantly even for all the 3rd party payment gateway transactions.
Btw, you will probably see the industry not allowing funds to be used on the same day of fund transfer through the gateway starting Feb 2023 when the next bunch of regulations come into play, which will take up the working capital requirement for a broker significantly.
We should even at that time be okay to continue offering the same user experience as today.
Funds on my trading account has been removed as it says “funds transferred back as part of quarterly settlement”. But the money still has not been credited to my bank account. But the funds from my trading account has been removed and says that its already sent to your bank account. Is this normal? Will it take a day or two to be credited to my bank account.
The banks are clogged today due to a large number of payout requests. You should have the funds latest by the end of the day and worst case by tomorrow.
I traded yesterday. It was with a very small percentage of my total capital so no chances of margin penalty. Today after quaterly settlement the daily margin statement is showing a negative value. So i need to bring that money in by monday, right?
The negative value is either something you bought or the loss in the account. So yeah, need to bring it on Monday. Ideally, there shouldn’t be a negative. Can you DM me the ID, I will have someone check and respond to you.
If you use 3rd party payment gateway providers, they don’t settle instantly with the merchant for any of the payment modes Merchant = broker in this case.
50% of the margin used for your F&O trades has to be available in cash even if you have pledged collateral. In case the opening cash balance and funds added for the day are inadequate but you have enough collateral pledged, your trade will go through but your available cash balance will become negative.
Using your screenshot as an example:
Your margin used is 248292.21 and you have adequate collateral to take the trade. But since you need to maintain 50% of this in cash, first your available balance is reduced.
i.e.
Opening cash balance - 50% of used margin =
124229.60 - 124146.105 = 83.495
Why does the screenshot say -115.88 instead of 83.495?
This will likely be due to realised or unrealised losses in your position.
@nithin hello sir ; ) I still haven’t received money back on primary bank acc! that’s means I will end up missing trading on Monday tho? bcoz zerodha always sent money to bank probably by Monday 3pm around even my friends who’s not using zerodha or xyz broker they receive there money!!
even my friends who’s not using zerodha or xyz broker they receive there money!!