Why can I use funds for trading but not withdraw them?

This happens because of how settlement works in Indian markets. When you sell shares, the funds become usable as trading margin for placing new orders almost immediately (sometimes on the same day), but they’re not withdrawable to your bank account until the trade settles, which under India’s T+1 settlement cycle takes one business day after the trade date. So on the day you sell, you might see the proceeds reflected and even use them to place another trade, but a withdrawal request for that same amount would be blocked or delayed until settlement completes. Similarly, funds blocked as margin against an open position aren’t withdrawable while the position remains open, even though they technically sit in your account. You check whether the funds in question came from a recent sale still within settlement, or are currently earmarked as margin, before assuming there’s an error blocking your withdrawal.