If you have been investing or trading for a while, you already know that Stock Brokers like Dhan are required to settle the credit balance in a client’s trading account periodically. As per a recent SEBI circular, the settlement process has changed a bit. This has been done to standardize the settlement cycle across the broking industry.
How has the Settlement Process Changed?
Not so long ago, the running account settlement process was staggered. Every broker followed a slightly different cycle, albeit within the settlement range mentioned by SEBI.
For example, if you traded even once in a quarter, then your account would’ve been settled anytime between 45-90 days.
Moving forward, Dhan and all stock brokers are required to settle the credit balances in trading accounts on the first Friday of every quarter.
| Year | Quarter | Settlement Date | Bank Holiday? |
|---|---|---|---|
| 2022 | Q2 (JAS) | October 7th | No |
| 2022 | Q3 (OND) | January 6th | No |
| 2023 | Q4 (JFM) | April 7th | Yes |
| 2023 | Q1 (AMJ) | July 7th | No |
| 2023 | Q2 (JAS) | October 6th | No |
Link to the SEBI circular: Settlement of Running Account
How Does This Impact You?
Once the quarterly settlement is processed - Dhan will send back the unutilized funds in your trading account back to your registered bank account, which means your trading account on Dhan will not have any money in it.
If you are someone who wants to take a trade on Monday, 10th October 2022, you will have to add funds back to your Dhan trading account on Saturday or Sunday or when the markets open on Monday using any of the following methods:
- UPI
- Netbanking
- Smart Transfer with RTGS / NEFT
This will ensure that you jump right into trading on Monday without the hassle of transferring funds.
Dhan Pro Tip: We hope you know that adding money on Dhan using any payment method - UPI, Netbanking or Smart Transfer (NEFT / RTGS) is absolutely free and we do not charge any additional fees for the same. And with Smart Transfer you can add up to INR 99.99 Lacs per transaction.
Here’s a walkthrough of how you can fund your Dhan account:
How to Transfer Money from Bank to Demat Account 
- Add Money in Demat A/c - Fund Transfer | Dhan
FAQs: Frequently Asked Questions
Q. What is a Running Account Settlement?
When you open a trading account, you give the broker authorization to keep the idle/unused funds in the account as is. This is known as a running account. Settlement is the process by which a broker sends the idle/unused funds back to your registered bank account.
Q. What if there’s a Credit Balance but no trade made in 30 Days?
If you haven’t done any transaction in 30 days but have a credit balance, brokers are required to settle your credit balance within three working days after the 30th day. At Dhan, accounts of users who haven’t made a trade in a calendar month are settled in 26-30 days. This is independent of the running account settlement.
Q. What about accounts opened in the JAS (July - August - September) Quarter?
If you’ve opened an account with Dhan in the July-September quarter, your account will be settled in the next settlement cycle which is the first Friday of January 2023.
Q. What will be the amount Dhan can retain during Settlement?
If there’s an outstanding trade position on the first Friday of the settlement cycle, a broker can retain the following:
- 100% of the pay-in obligation due at EOD on the date of settlement. The pay-in obligation is the gross amount of funds due from you. This is applicable across equity, commodity, and currency.
- 50% of EOD margin required as cash margin. This excludes the MTM loss margin or option premium payable, which is referred to as Consolidated Crystallized Obligation in the official circular.
- Total 225% of EOD margin, which is a combination of 50% as cash margin ( as above ) and 175% as margin pledge (an appropriate haircut will be applicable for the margin fulfilled by the way of pledge). When margin pledge is not sufficient the same may be retained from available cash.
Q. How to add Settled Funds back to a Trading Account?
You can add funds back to your Dhan account using Netbanking or UPI. If you’re on Web, follow these steps:
- Login via web.dhan.co
- Click on “Money”
- Enter the amount
- Click on “Add Money”
- Choose UPI, Net Banking, or Smart Transfer
That’s it!
If you’re on mobile, follow these steps:
- Login to the Dhan app
- Click on “Money”
- Enter the amount
- Click on “Top-Up Funds”
- Choose UPI, Net Banking, or Smart Transfer
Authorize the transaction and you’ll be ready to trade!