T+0 Same-Day Settlement in Indian Equities: How It Works and What It Means for Investors
India became one of the first major global economies to pioneer T+1 rolling settlement for all equities. Now, SEBI has introduced an optional T+0 (same-day settlement) mechanism for a select basket of liquid securities.
1. Understanding T+0 vs T+1
Under standard T+1 settlement, when you sell shares on Monday, the sale proceeds become fully available for withdrawal into your bank account on Tuesday evening. Under T+0 settlement, trades executed before the cutoff time settle on the same trading day, providing instant liquidity to sellers and immediate share credit to buyers.
2. Investor Benefits and Market Architecture
- Zero Clearing Risk: Eliminates overnight counterparty risk between clearing corporations and broker members.
- Capital Velocity: Retail investors can redeploy funds instantly without waiting for clearing cycle delays.
- Future Roadmap: SEBI envisions a phased transition toward optional Instant Settlement using Unified Payments Interface (UPI) mechanisms.
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