Why was the withdrawal request rejected?

Withdrawal requests can be rejected due to the following reasons:

• Funds from trades are yet to be settled. The funds from equity and F&O trades are not settled instantly. Exchanges require T+1 day to settle funds from selling equities, and F&O trades to the Zerodha account before they can be withdrawn. In the case of intraday and F&O, it is the time taken for the realised profits, M2M, or sell value of options to be credited to the Zerodha account. See What does settlement cycle mean?
  
• Money added during the day is available for trading immediately, but cannot be withdrawn on the same day. Since Zerodha has to reconcile the balances at the end of the day to avoid issues with crediting funds, these funds can be withdrawn after one day. ¹
• Money added through the payment gateway can take up to T+1 days to be credited to Zerodha. In case it is not credited immediately, Zerodha's capital is blocked to allow clients to trade on T day, and hence same day withdrawals are not possible.²

Did you know? If a withdrawal request for an amount greater than the withdrawal balance is placed, the available withdrawable balance will be credited to the bank account. See What is withdrawable balance on Console?

Example Scenario

1. The withdrawable balance is ₹9000.
2. A withdrawal request for ₹12,000 is placed.
3. ₹9000 will be credited to the bank account.

Notes

¹Withdrawal requests are processed after the trading session, since the obligations for all the trades during the day have to be considered. Since there can be issues with crediting of funds, withdrawal requests are processed after reconciling the funds with the respective banks. Due to the volume of the transactions, banks share the transaction details by the early morning of the next day, i.e., T+1 day. After receiving the transactions details, Zerodha reconciles them and fund withdrawals are processed.

There have also been cases where Zerodha has received the wrong confirmation of fund credits from banks, and transactions have been reversed. In order to avoid such issues, fund withdrawal requests are processed on T+1 day.

²When funds are transferred through payment gateways, clients get the credit on the same day. But the funds are settled by the payment gateways only on T+1 or T+2 days to Zerodha’s account. Until then, Zerodha funds the margins for the trades from its own capital. Since Zerodha receives credit of funds transferred through payments gateways on T+1 or T+2 days, processing withdrawal requests of funds added on the same day would mean funding them from Zerodha’s own capital. This is the reason why withdrawal requests of funds added on the same day cannot be processed.