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A post on social media that accused Zerodha of limiting client withdrawal incited extensive discussion on Monday, which resulted in CEO and co-founder Nithin Kamath issuing a public update. The accusation stemmed from an X user who suggested the brokerage firm was blocking a large withdrawal, implying the possibility of some wrongdoing.
The issue began when investor and doctor Aniruddha Malpani claimed on X that Zerodha was preventing him from withdrawing funds exceeding Rs. 5 crore.
Malpani alleged that the platform was “using his money for free,” citing screenshots that appeared to show a message requiring users to raise a support ticket for withdrawals above the Rs. 5 crore.
The post soon gained momentum on the internet, with some users questioning the firm's transparency and others defending the company's safeguards. Given Zerodha's status as India's largest retail brokerage firm, the post went viral and even prompted a response from Kamath himself.
Addressing the concerns directly, Nithin Kamath replied on X, stating that Malpani’s payment requests had already been taken care of and iterating that Zerodha has industry-standard checks in place for large transactions.
“Hi Dr, your payout requests were processed yesterday. We need to ensure, for the sake of our systems’ sanity (like all other financial services firms), that we have some checks in place when clients withdraw funds. As you can imagine, numerous potential issues can arise during the withdrawal process, and once funds are paid out, there is no way for us to recover them. Hence, Rs. 5 crore is the threshold at which we ask customers to create tickets,” Kamath explained.
According to Zerodha’s official policy, clients can withdraw any amount up to Rs. 5 crore directly via the Console platform. Users have to submit a support ticket, and the processing of the amount would take place manually, following a verification check in case of withdrawals over Rs. 5 crores.
Such protocols are in place across financial institutions to ensure that the operations run smoothly and reduce the risk of unauthorized transfers. Once funds are transferred, recovering them is nearly impossible, making the safeguards vital for keeping both the clients and the system safe.
Kamath's timely clarification was appreciated by many on the internet. Many users noted his transparency and responsiveness, and even called it "a model example of customer communication."
One user said, "This is a sensible safeguard. Love the CEO's real-time response." Another user said, "Zerodha keeps doing the right thing for its customers."
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This episode shows the necessity of open communication between the fintech platforms and their customers. Kamath, with his quick response to queries, enhanced Zerodha’s reputation for transparency, security, and customer trust, one of the reasons why it is the leader in India’s growing investment market.
