India will become the second largest country in the world in T+1 settlement

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256 shares of final batch to be implemented from Friday T+1: All shares will come under T+1 settlement in stock markets from January 27

Nifty 50 and Sensex stocks including Reliance Industries, Infosys, Tata Motors, Dr. Reddy's Laboratories, State Bank of India

Mumbai: T Plus One settlement cycle will be implemented in Indian stock markets from next Friday, January 27, 2023 in all listed stocks and scrips. In this T Plus One settlement cycle implemented in phases, T Plus One settlement will be implemented in 256 shares from Friday in the final batch. Experts have expressed confidence that the T Plus One settlement will be implemented easily in this final batch without disruption by the stock markets. Along with this, India will be the second country in the world to implement T Plus One settlement cycle in all stocks after China. T Plus two settlement cycle is still applicable in markets like America, Europe and Japan.

It is worth mentioning that all the index stocks and the stocks trading in the derivatives market are shifting to T Plus One settlement from January 27. This T Plus One settlement cycle means that the purchased shares will be deposited in the investor's demat account the day after the purchase or sale of the shares.

Till now trade settlement in India used to trade on T plus two basis, i.e. on the day on which shares were bought or sold by the investor, the deposit and withdrawal were done two days after the trade.

Exchanges were given the go-ahead to offer T Plus One or T Plus Two settlement following requests by various stakeholders for a shorter settlement cycle by SEBI. After which it was decided to move towards short settlement cycle on a phased basis by the exchanges-share markets as brokers make necessary changes in their trading infrastructure and obtain necessary approvals as well as foreign institutional investors take time to complete the process while trading in different time zones in different countries.

The stock markets then implemented the T Plus One settlement cycle in February 2022 for at least 100 stocks with market capitalization in the first phase, after which new stocks were added in phases every month. Now T Plus One settlement cycle is going to be implemented in the final batch of 256 shares. In which Nifty 50 index and Sensex stocks like Reliance Industries, Infosys, Tata Motors, Dr. Reddy's Laboratories, State Bank of India will be included. Along with this, Dabur India, Ambuja Cements, Tata Chemicals, PB Fintech, FSN E-Commerce, Delhivari, One97 Communications will also be included.

Implementation of the T Plus One settlement cycle will benefit investors by providing better liquidity and increasing trade and public participation. Of course against this advantage there will be trade settlement challenges for a bank or a large bank as settlement days decrease in certain risks. Along with this, there will be challenges to carry out the settlement even in the circumstances of extraordinary volatility in the stock markets.

What is T Plus One Settlement?

T plus one settlement means that on the day the stocks are bought and sold, the stock trade has to be settled within a day or 24 hours. For example, if an investor bought 50 shares on Monday, these shares should be deposited in his demat account on Tuesday. When the seller of these shares should get the money in his account accordingly.


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