A social media post from a high-net-worth investor triggered a storm around Zerodha, India’s largest discount brokerage. The investor accused the platform of restricting his withdrawal to only ₹5 crore despite having more than ₹18 crore in his account. His post used the word “scam,” and that single word set off a wave of anger, confusion, and debate among traders and investors across India.
The incident exposed a gap between investor expectations and brokerage rules. It also raised a critical question: Can a broker limit how much money you withdraw from your own trading account in a single day?
What Actually Happened?
Mumbai-based investor and doctor, Dr. Aniruddha Malpani, posted publicly that he could not withdraw more than ₹5 crore from his Zerodha account in a single day, even though his account showed ₹18 crore as a withdrawable balance. His post implied that Zerodha deliberately blocked access to the full amount and labeled it as a scam.
The post spread rapidly across X (formerly Twitter), LinkedIn, and financial forums. Retail traders, HNIs, and even seasoned market participants began questioning whether Zerodha had the right to restrict withdrawals. Some users shared similar concerns, while others defended the platform and asked the investor to check the withdrawal policies.
Within hours, the situation escalated, and mainstream news outlets started reporting the controversy.
Zerodha’s Response
Zerodha founder Nikhil Kamath responded on social media and clarified that the withdrawal had already been processed and the investor would receive the funds. He firmly refuted the allegation of a scam.
Nithin Kamath, CEO of Zerodha, also addressed the issue. He explained that the company follows a fixed daily withdrawal limit to ensure smooth banking operations, settlement processes, and compliance with risk management norms.
Both founders emphasized that:
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Zerodha did not block the investor’s money.
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The platform allows a maximum withdrawal of ₹5 crore per day.
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The remaining funds can be withdrawn in additional requests on following days.
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The system applied a standard rule and not an arbitrary restriction.
Their responses calmed some users but also opened up a wider debate—Why do brokers impose such limits at all?
What Do Zerodha’s Rules Say?
Zerodha clearly mentions in its withdrawal policy:
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Investors can withdraw up to ₹5 crore per day per account through regular withdrawal.
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For instant withdrawal, the upper limit is ₹2 lakh per day, only if there are no active F&O positions or margin obligations.
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Withdrawals happen in fixed payout windows, usually after trade settlements complete.
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Funds from intraday or derivatives trades become available only after settlement (T+1 or T+2 depending on segment).
The investor’s account indeed displayed ₹18 crore as withdrawable balance, but that does not override the ₹5 crore per-day payout limit.
This reveals the core of the controversy—users saw a large available balance but didn’t expect a daily withdrawal barrier.
Why Do Brokers Impose Withdrawal Limits?
Brokers run financial operations that depend on stock exchanges, clearing corporations, and banks. They impose withdrawal limits not to restrict ownership of funds but to maintain stability, liquidity, and compliance.
Here’s why withdrawal caps exist:
1. Risk Management
Brokers handle thousands of crores in client funds every day. Large unplanned withdrawals can impact their settlement balances with exchanges. A limit ensures they don’t face liquidity mismatches.
2. Unsettled Trades
If an investor sells shares today, the broker receives funds only after the exchange settles the trade. Even if the platform shows the balance as withdrawable, some cash may still lie in temporary or clearing pools.
3. Banking System Constraints
Banks follow RTGS, NEFT, and internal approval processes for high-value transactions. A ₹5+ crore payout often requires manual authorization and verification. Splitting the payout reduces delays and banking risks.
4. Fraud Prevention
Large payouts invite security checks. Fraud teams scan transactions to ensure no unauthorized access, hacked accounts, or scams are involved.
In short—the limit protects the broker, the banking partner, and the investor. But when users don’t know the rule, it creates mistrust.
Was the Investor’s Money Actually Blocked?
No. Zerodha processed the withdrawal request in tranches, starting with ₹5 crore, as per the policy. The investor could withdraw the remaining amount in subsequent days. The issue did not involve dishonesty but rather lack of communication and expectation mismatch.
The investor expected immediate access to all ₹18 crore. The platform followed its policy without explaining it clearly at the time of request. That silence turned a procedural issue into a public controversy.
What Should Investors Do During Large Withdrawals?
If you plan to withdraw a large amount from your trading or demat account, you should prepare instead of panicking. Here’s a checklist you can follow:
✅ Step-by-Step Guide
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Know Your Broker’s Withdrawal Limit
Check the daily payout cap. For Zerodha, it is ₹5 crore per day. -
Plan Ahead
If you want ₹20 crore, you can request ₹5 crore daily over four days. -
Close Open Positions
Withdrawable balance becomes accurate only if no margin-based or unsettled trades exist. -
Avoid Last-Minute Requests
Withdrawal requests after the payout cut-off get processed the next day. -
Check Bank Details and Beneficiary Information
Incorrect banking details can delay or block payouts. -
Maintain a Communication Trail
If you expect a large fund transfer, inform the broker’s support team in advance.
Bigger Questions This Incident Raises
The controversy reveals bigger problems in India’s rapidly growing retail trading ecosystem:
1. Transparency Needs Improvement
Platforms must show withdrawal limits clearly on the same screen where users request payouts.
2. Financial Literacy Still Lags
Even wealthy investors may not fully understand settlement cycles, margin systems, and withdrawal rules.
3. Trust Can Break Easily
One misunderstood policy can harm a brand built over years. Brokers must communicate proactively to protect trust.
Final Opinion: Scam or System Rule?
This was not a scam. Zerodha followed its standard operating rule. The investor expected unrestricted access to all funds instantly. The platform did not communicate the rule clearly at the point of withdrawal.
The entire episode highlights a lesson for both investors and platforms.
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For investors: Understand systems before reacting.
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For brokers: Communicate rules where they matter—not in hidden policy documents but at the user action point.
Conclusion
Zerodha did not block the investor’s funds. It processed the maximum allowed amount per day under its own policy. The storm erupted because investors equate “withdrawable balance” with “immediately withdrawable amount,” but in practice, banking and regulatory systems still impose limits.
Money remains yours. But the rails that move money still follow rules.
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