'Zerodha scam': Investor flags ₹5-cr withdrawal rule; CEO Kamath responds

Investor Aniruddha Malpani alleged Zerodha blocked his ₹42.9 crore withdrawal, calling it a 'scam'; CEO Nithin Kamath clarified the ₹5-crore limit is a safety check

Don't want to miss the best from Business Standard?

A social media post alleging that Zerodha, one of India’s largest stockbrokers, was preventing a client from withdrawing his funds went viral, prompting CEO and co-founder Nithin Kamath to step in with a clarification.

 

The post, made by Mumbai-based IVF specialist and investor Dr Aniruddha Malpani, accused Zerodha of using his money “for free” after he was told that the platform had a daily withdrawal limit of ₹5 crore. Malpani shared screenshots on X showing that the system required him to raise a support ticket for any withdrawal exceeding that amount. 

  He claimed that despite having a withdrawable balance of around ₹42.9 crore, he was unable to take out more than ₹5 crore in a day and described this as a “scam”. The post quickly gained traction among traders and investors, sparking a debate on withdrawal processes at online brokerages.

 

What did Zerodha CEO Nithin Kamath say in response?

 

Responding to the allegation, Kamath clarified that Malpani’s payout requests had already been processed and that the ₹5-crore threshold was a standard internal check, not a restriction on client funds.

 

“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,” Kamath wrote on X. 

 

  He added, “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, ₹5 crore is the threshold at which we ask customers to create tickets to withdraw.”

 

The ₹5-crore rule, he explained, is a safeguard to verify large transactions and prevent errors or potential fraud. Once verified, the funds are released like any other payout.   

 

Why do brokerages have withdrawal thresholds?

 

According to Zerodha’s website, clients can withdraw any amount available in their trading account. Withdrawals up to ₹5 crore can be made directly through the Console platform, while larger payouts require a support ticket for manual verification.

 

Such thresholds are common across the financial sector, including banks and other brokerages. They help prevent operational glitches, fraudulent transactions, and compliance issues that can arise when processing high-value transfers.