Nithin Sir Plz Solve My Confusion About Zerodha Coin

@nithin sir I’m already invest heavily in Mutual Funds but in Regular plans So Now i want to Create Account in Coin For Direct Plans…

Sir assume that i Create Wealth of 1cr in my Future through Coin app

So if i Place My 1cr of amount withdrawal request through Coin app So who is transfer my 1crore amount to My bank account?

AMC…?
Zerodha…?
Or AMC Send Money To Zerodha And then Zerodha Transfer My Fund To My Bank Account…?

Sir I’m a big well wisher of Zerodha so Don’t mind my words Plz

Assume that i place my 1cr withdrawal request through Coin after 15 years and that time zerodha’s financial condition is not that Good and zerodha not able to transfer my Fund To my bank account bcz of any XYZ reason so what happened Next…?

Bcz that particular time my 1cr is in Zerodha’s hands right…?

Plz don’t mind my words… :roll_eyes:

@nithin
@siva

As your investment with zerodha is in a demat mode, the units will be credited to your demat account when you invest via coin. Once you redeem the MF scheme the amount will be credited back to your zerodha trading account according to the settlement time of the fund. Once you see that the payment credited to your trading account then you can place a withdrawal request from https://console.zerodha.com/funds/overview

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Sir I’m a big well wisher of Zerodha so Don’t mind my words Plz

Assume that i place my 1cr withdrawal request through Coin after 15 years and that time zerodha’s financial condition is not that Good and zerodha not able to transfer my Fund To my bank account bcz of any XYZ reason so what happened Next…?

Bcz that particular time my 1cr is in Zerodha’s hands right.?

Plz don’t mind my words… :roll_eyes:

@ad09

you have a very valid concern, so don’t worry or be sorry about your question.

Ask away confidently.

When you purchase some mutual funds units at Zerodha, the units are delivered to your CDSL demat account that you have with us. To debit any units from a client’s demat account the Broker needs a POA from the client. Without the same, we will not allow you to place a redemption request. You can refer to this link to know more in regards to POA.

After 15 years once you give an instruction to redeem the mutual fund, the units will get debited from your Demat account and the AMC will give a payout of the units redeemed in your Name to us as the orders are being directed through us and we will credit the same to your trading account from our end.

In a worst-case scenario where you feel that “zerodhas financial condition is not that good and if Zerodha is not able to transfer the funds to your bank account due to XYZ reasons”, if at that point of time you feel that your investments are unsafe with Zerodha, before placing a redemption request you can easily transfer the units via DIS slip from the CDSL demat account you have with zerodha to some other demat account or you can even rematerialize the units and transfer them to the AMC and place a redemption request.

You can also refer to this explanation where Nithin has explained clearly in regards to how safe are your investments with zerodha :slight_smile: hope this helps.

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But sir as you said that Zerodha have POA To Handle My Zerodha coin account right?

So if zerodha financial condition is not good after 15 years and zerodha need huge amount of money for their xyz reason so in that case zerodha can place withdrawal request of my Funds bcz zerodha have POA of my account So Ones Zerodha place a request and money arrived at zerodha account so again my money is in Zerodha’s hands right?

Bcz CDSL will not ask for a confirmation to client that
Zerodha wants to withdraw your Matual Funds
“Are you allowed them to withdraw Yes or No”

I know this kind of thinking is not right but this is important for my Future Goals… @Neelesh_Verma

Yes, broker may misuse POA. (karvy for example)

But big daddy SEBI is there to protect you. As a last option Investor protection fund

@ad09 please don’t be sorry about your confusion …these are general questions and many have them. We should know where our each penny is going so don’t worry and feel free to ask… someone will answer your query …

And about Zerodha redeeming your units since they have POA and using it for there purpose is all about trust in that case you might not able to trust any broker. Its about Brand and company ethics…
If I am not wrong Karvy recent case is of similar type bt regulatory bodies are there to have check. May be someone more expert van through some more light on this :innocent: @nithin

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@ad09

After the karvy incident. It may be advisable to go for AMC directly. That way you credit/debit via your Bank account and not trading/demat account.

This may give you some peace of mind.

I have major investments in coin and even i m worried now to make any investment via ANY broker.

I don’t think SEBI can do anything to any broker who misuses POA or your money. They are there only to give an image/sense of security.

The other day SEBI sent an email basically saying you are responsible if something goes wrong. We can’t do anything.

I wonder how karvy investors are feeling now. something similar to customers of PMC bank.

Difficult times for investors in this country be it FD or MF investors.

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Although everything seems to be safe as MF goes into CDSL account but when you want your money back you suddenly see the fine print & our regulators/govt stay away. 9 PMC bank depositors have died & you see what’s happening…nobody is bothered. A common man will always suffer…

The demat account that you open today is with the depositories (NSDL/CDSL) and we the depository participant is just a conduit. SEBI has done an awesome job to ensure that if any issue DP or the Broker, the securities lying in demat shouldn’t get affected. Even in the case of Karvy, the securities lying in demat has had no issues. All clients have been free to move it to any other demat account of theirs.

Coming to the issue of Karvy misusing the POA and pledging client securities to raise money, the new regulations from SEBI doesn’t allow any of that. That is the reason the Karvy issue showed up in the first place. But your concern is valid, the good news is that we already have a non-POA way of operating the demat account which is in beta. All new clients who are opening accounts with us today, don’t have to send us any POA. Once this is tested, we will in the next few weeks allow all our existing customers to opt into this. There are a couple of issues with this method though - there is a restriction of maximum selling amount of Rs 1 crore per day and everytime you place a sell/redemption order, you have to click on a button authorizing debit of securities from demat.

Btw check this recent podcast I did on this topic:

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@nithin sir you are absolutely right But

Sir i ask this same question to Paytm Money and yesterday they contact me through their support system

and they say that when ever you place withdrawal request through Paytm Money app then Your total withdrawal amount was sand to your bank account directly via The AMC not by Paytm :roll_eyes:

Just 5min ago i receive email from Groww they also saying that when ever you place withdrawal request in Groww and you select Bank transfer option. Then you got your money in your bank account directly through The AMC not by Groww

So I’m not asking for add automatic bank transfer option in zerodha coin I’m saying that client withdrawal amount has not to Transferable in any brokers account

(This topic is all about matual funds not about Stock trading. in short This is about Zerodha Coin Not For Zerodha Kite )

@nithin sir if I’m missing something then plz guide us

Your well wisher @ad09

We do mutual fund business through exchange platform, exactly like the way we do the stock trading business. That is why the behavior is the same for stocks and mutual funds both for funds for purchase and the way it hits trading account on redemption. This is the only reason we can also offer Coin at 0 cost without losing any money to run that operation, unlike all other direct mutual fund platforms who don’t earn any money but also lose a lot of money just to survive, which I guess you’d understand can’t happen for too long.

Coming back to the two platforms you have mentioned, they will soon go live with stock trading, and I’d guess that they would also shift to the way we settle mutual funds after that.

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