Investor Dr. Aniruddha Malpani alleged Zerodha stopped him from withdrawing Rs 18 crore, calling it a “scam.” CEO Nithin Kamath clarified the Rs 5 crore limit is a standard safety rule to prevent risks.
Mumbai-based investor and IVF specialist Dr. Aniruddha Malpani has accused online trading platform Zerodha of stopping him from withdrawing his own funds worth over Rs 18 crore from his demat account.
He called the restriction a “scam,” while Zerodha and financial experts have clarified that such withdrawal limits are part of regular security and regulatory checks used by all financial firms.
Dr. Malpani, who is also the founder of Malpani Ventures, posted screenshots from his Zerodha account showing an account value of Rs 42.92 crore, a used margin of Rs 24.46 crore, and a withdrawable balance of Rs 18.46 crore.
He wrote on X (formerly Twitter):
“The Zerodha scam! They don’t allow me to withdraw my own money from their account, saying the daily limit for withdrawal is Rs 5 crores. They use my money for free.”
He tagged Zerodha’s co-founder and CEO Nikhil Kamath, adding,
“This is unfair.”
A screenshot he shared from the Zerodha app showed a system-generated message:
“A maximum of Rs 5 crores can be withdrawn per day. For instant withdrawals, the request must be between Rs 100 and Rs 2,00,000 per day. The withdrawal limit is subject to the availability of a withdrawable balance in the trading account.”
Responding to the allegations, Zerodha’s support team replied on X, explaining that withdrawal requests of more than Rs 5 crore could be handled through their customer support portal. They wrote that such cases require the user to “raise a support ticket” for manual processing.
After Dr. Malpani shared proof that he had already submitted the ticket, the company confirmed that “the issue was being reviewed.”
Later, Zerodha co-founder Nithin Kamath personally addressed the issue, clarifying that the withdrawal requests had already been processed and that the Rs 5 crore limit was part of standard operating protocols.
He wrote:
“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 to withdraw.”
Meanwhile, Ajay Rotti, Founder and CEO of Tax Compaas, defended Zerodha’s policy, stating that such controls are necessary to maintain safety in financial transactions.
He said,
“It isn’t a scam. I would rather deal with a broker who has controls like these and prevents actual scams of someone cleaning up my account in a day.”
Rotti added that similar withdrawal limits exist in banks and UPI systems to ensure the security of large transactions.
He further explained,
“People need to be aware of these limits and plan their transactions if they want to do it online. Else, there is always an option to increase these limits and those need to be used. No point crying Scam for everything on social media.”
Legal and Regulatory Context
Under SEBI’s regulations, stockbrokers like Zerodha must follow strict risk management and client fund protection norms.
According to SEBI (Stock Brokers) Regulations, 1992 and SEBI’s circulars on segregation and monitoring of client funds, brokers cannot use client funds for their own business and must maintain clear segregation between client and proprietary accounts.
However, operational controls, such as daily withdrawal limits, are allowed as internal risk measures to prevent system abuse, cyber fraud, or operational errors during high-value transactions.
These safeguards are also meant to protect the integrity of electronic trading systems that handle thousands of clients simultaneously.
The RBI and SEBI guidelines both encourage online financial platforms to adopt layered security checks — including withdrawal limits, multi-level authentication, and manual verification for large transfers.
Such policies are considered a standard part of compliance for preventing financial crimes, data theft, and unauthorized fund movement.
Zerodha, in its own policy, permits withdrawals up to Rs 5 crore per day, while instant withdrawals are limited to Rs 2 lakh between 9 AM and 4 PM, subject to the availability of funds in the trading account.
Understanding the Legal Framework Behind Zerodha’s Withdrawal Limit
In India, online stockbrokers like Zerodha operate under the Securities and Exchange Board of India (SEBI) framework, which lays down strict rules on client fund segregation, withdrawal procedures, and operational risk control.
These rules are meant to ensure that investors’ money remains protected and that brokers don’t misuse client funds for proprietary trading or other business activities.
According to SEBI’s circulars (dated July 20, 2023, and earlier guidelines on client-level segregation), brokers are required to:
- Keep client funds and securities separate from their own accounts.
- Ensure that fund transfers are traceable and verifiable through approved payment systems.
- Maintain daily reconciliation between client ledger balances and bank accounts.
- Allow withdrawals only from confirmed and cleared funds, avoiding reliance on unsettled balances.
SEBI also allows brokers to implement internal operational limits—like Zerodha’s Rs 5 crore withdrawal cap—as part of risk management systems. These limits help prevent fraud, data breaches, or mistakes that could impact not only one user but the entire system.
From a compliance perspective, the daily withdrawal limit acts as a control mechanism under SEBI’s Master Circular for Stock Brokers (April 2023), which mandates that all intermediaries must have “internal risk management frameworks” to deal with large-volume financial transactions.
In addition, the Reserve Bank of India (RBI) supports such safeguards under its cybersecurity and digital payment regulations, which require financial intermediaries to implement withdrawal thresholds and manual verification for high-value transfers to prevent money laundering, cyberattacks, and unauthorised access.
Rights of Investors
While investors have the right to access and withdraw their funds at any time, brokers are equally bound by fiduciary duties and operational security requirements. In case of disputes or alleged restrictions beyond policy limits, investors can approach:
- The Stock Exchange Investor Grievance Redressal Mechanism (NSE/BSE)
- The SEBI SCORES platform (SEBI Complaints Redress System)
- Or initiate arbitration proceedings under SEBI’s prescribed dispute resolution framework.
Practical Implications
In essence, Zerodha’s Rs 5 crore withdrawal rule is not arbitrary but a risk-based compliance safeguard. Once a client raises a ticket for amounts exceeding this limit, the firm must manually verify the transaction before releasing the funds — a process that aligns with both SEBI’s and RBI’s financial security norms.
Such practices are increasingly common in the Indian fintech and brokerage ecosystem, balancing investor protection, operational safety, and regulatory compliance in a digital-first financial environment.
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