Banks are an essential part of the financial ecosystem. They make it possible to move funds from your bank account to your trading account, which are connected by a broker after verifying your bank account.
You can link multiple bank accounts to your trading account, allowing for the transfer of funds and trading. However, only one of these bank accounts can be designated as the ‘Primary account’, from which withdrawals will be processed.
In addition, money from dividend payments and buybacks will be sent to the primary bank account associated with your trading account, the Depository, the Registrar, and the transfer agent (RTA).
By now, you should be aware of the fact that three distinct financial intermediaries require three separate accounts (add link to related articles); a trading account from your broker, a demat account from a depositary participant, and a Bank account from a bank. All of these connect electronically to give an uninterrupted, easy experience.
NSE Clearing Limited and ICCL
NSE Clearing Limited and Indian Clearing Corporation (ICCL) are fully owned by the National Stock Exchange and Bombay Stock Exchange, respectively.
The clearing corporation’s function is to assure the reliable settlement of your trades. For example, if you acquire a Biocon share for Rs.446, somebody must sell it to you at the same price. In this situation, the amount will be deducted from your account and credited to the seller for the sale of Biocon. The role of the clearing company in such a deal is to guarantee:
It is completely fine if you don’t know much about NSE Clearing Limited or ICCL, since you wouldn’t have any direct contact with these organisations. However, it should be noted that they are subject to heavy regulation and facilitate the settlement procedure.
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