Running Account Authorization & How Does it Work on Groww?

Running Account Authorization (RAA) 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.

How does Running Account Settlement work on Groww?

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.

Scenario 1: Quarterly/monthly settlement cycle

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 the event that Friday is a trading holiday, settlements will be made 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 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 transactions.

Note - In order to trade back, you'll have to add the funds back to your Groww Balance.
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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 the investor has opted for running account authorisation, the funds will be settled (sent to your primary bank account) once every 30 or 90 days as discussed above. 

     4. Is it mandatory to complete RAA?

Yes, it is mandatory. When opening a new demat account, you will be asked whether you want the funds to be settled in your account within 30 or 90 days. However, RAA is not an option on the whole 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 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.