Running Account Authorization is a process by which investors can authorize 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.
As per SEBI circular SEBI/HO/MIRSD/DOP/P/CIR/2022/101 dated July 27, 2022, any amount in your Groww balance account will be transferred to your primary bank account within 30 or 90 days.
Let's understand this with the help of two scenarios.
As per SEBI guidelines, if you are a regular trader/investor, your account will be settled and the remaining amount in the Groww balance will be refunded to your primary bank account on the first Friday of every quarter or month depending on which settlement cycle was chosen by you.
In case Friday is a trading holiday, the settlements will be done on the previous trading day.
If you have not used your Groww Balance for any trades/investment transactions for 30 days straight, money remaining in your Groww Balance account will be sent to your primary bank account on the 30th day of no transaction.
Note - In order to trade back, you'll have to add the funds back to Groww Balance.
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Yes, it is completely safe. RAA is nothing but an authorisation given by you to your broker on retaining 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 Exchanges brokers, there is no need to worry.
2. What amount Groww can retain during the Settlement?
If you have an outstanding trade position on the first Friday of the given settlement cycle, a broker is authorized to retain the following:
3. What does it Change for me?
If the investor has opted for running account authorization, the funds will be settled (sent to your primary bank account) once in 30 or 90 days as discussed above.
4. Is it mandatory to complete RAA?
Yes it is mandatory. While opening a new demat account you will be asked if you want the funds to be settled in your account in 30 or 90 days. However, RAA on the whole is not an option and is mandatory due to SEBI rules.
5. Do I have to maintain a minimum balance if I opt for RAA?
No, there is absolutely no need of maintaining 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 be you. The money lying in your Groww Balance account will be automatically sent to your primary bank account depending on a few guidelines.