Running Account Authorization & How Does it Work on Groww?

If you have ever noticed funds being credited back to your bank account from your trading account, it is likely due to something called Running Account Authorization (RAA). It is a process by which investors can authorise their broker to retain funds in their trading account. Previously, the settlement date was voluntary for the user, but now, post the SEBI circular, the settlement cycle has been standardised for the industry.

Let’s break down what it means, why it happens, and when you can expect your funds.

Why Does Settlement Happen?

As per SEBI regulations, brokers are required to periodically settle your account, which means any unused balance in your trading account is transferred back to your bank account. This ensures transparency, better control over your funds and reduced risk of misuse.

How does Running Account Settlement work on Groww?

As per SEBI guidelines, your unused balance in the Groww trading account is periodically transferred to your primary bank account based on your chosen settlement cycle.

Additionally, as per the latest SEBI circular released on Jan 2025, if there has been no trading activity in your account for 30 days, the available balance will be settled on the next scheduled Running Account Authorization (RAA) settlement date (monthly cycle).

Let’s understand this with two scenarios.

Scenario 1: Monthly/Quarterly settlement cycle (Active traders)

If you are a regular trader or investor, your account will be settled based on the cycle selected by you:

• Monthly settlement → Once every month
• Quarterly settlement → Once every quarter

On these settlement dates, any unused balance in your Groww account is automatically credited to your primary bank account. If the settlement date falls on a trading holiday, the process is completed on the previous trading day.

Kindly note the following dates on which the Monthly RAA and Quarterly RAA will be processed - 

Scenario 2: If there is no transaction in the last 30 days

If you haven’t placed any trades for 30 days, your account will be considered inactive. In such cases:

• Your funds will not be settled immediately
• Instead, they will be transferred on the next scheduled RAA date (monthly cycle)

This rule applies even if you have selected the quarterly settlement cycle.

Note - In order to trade back, you'll have to add the funds back to your Groww Balance.
Add Funds Now

Frequently Asked Questions

1. Is RAA Safe?

Yes, it is entirely safe. RAA is nothing but an authorisation given by you to your broker to retain funds in your account. It is returned to your bank account, depending on certain caveats discussed above. Moreover, with such strict norms of SEBI and exchange brokers, there is no need to worry.

     2. What amount can Groww retain during the Settlement?

If you have an outstanding trade position on the first Friday of the given settlement cycle, a broker is authorised to retain the following:

• 100% of the pay-in obligation is due at EOD on the settlement date. Here, pay-in obligation is the gross amount of funds due from you; applicable across equity, commodity, and currency.
• 50% of the EOD margin, which would be required as a cash margin. This is exclusive of the MTM loss margin or option premium payable, which is referred to as Consolidated Crystallised Obligation in SEBI's official circular.
• Total 225% of EOD margin, combining 50% as cash margin (as above) and 175% as margin pledge (an appropriate haircut applicable for the margin fulfilled by the way of pledge). When the margin pledge is insufficient, the same may be retained from available cash.

     3. What does it change for me?

If you have opted for Running Account Authorization (RAA), your unused funds will continue to be settled (sent to your primary bank account) based on your chosen cycle:

• Once every 30 days (monthly) or
• Once every 90 days (quarterly)

However, as per the latest SEBI circular (Jan 2025), if there is no trading activity in your account for 30 days, your funds will be settled on the next scheduled RAA settlement date (monthly cycle), irrespective of your chosen cycle.

     4. Is it mandatory to complete RAA?

Yes, Running Account Authorization (RAA) is mandatory as per SEBI regulations. While opening a demat account, you can choose whether you want your funds to be settled on a monthly (30 days) or quarterly (90 days) basis. However, opting out of RAA entirely is not allowed, as periodic settlement of funds is required under SEBI guidelines.

     5. Do I have to maintain a minimum balance if I opt for RAA?

No, there is absolutely no need to maintain a minimum balance as RAA.

     6. When should a client account be settled?

As per the exchange guidelines, the settlement of funds is done depending on the authorisation given by you. The money in your Groww Balance account will be automatically transferred to your primary bank account, subject to a few guidelines.