Hi @aspireinvestor,
I created an demat and trading account with Upstox (RKSV Securities) in 2018. However, I have never used this account, for reasons that I will explain.
First, the actual process of opening the account was fine. The person who I was dealing with was quite cooperative and helpful. I know that I must be considered difficult, because I insist on filling in the brokerage form myself, and checking everything by hand. I also usually have a lot of questions. Brokers always tell one to just sign these boxes, and they will take care of the rest. Anyway, so I eventually completed the process, including giving Upstox a POA, and was assigned an account. Then the following happened.
INCIDENT 1
I wrote to them to ask about how I could freeze hypothetical shares in my demat account. Hypothetical, because I didn’t have any shares in my Upstox demat account. I now do, though I didn’t buy them. But I’m getting to that.
This simple question was first ignored, and when I insisted, I eventually got the following reply back (quoting verbatim from my records):
For your fourth query which was how to freeze shares in a Demat account. I would let you know that , you cannot freeze shares in demat account.
I wrote back and said:
I don’t think this is correct. Please check. I’ve heard that this is possible from multiple sources.
Upstox:
Kindly let us know in what regards you are saying about freezing the shares. Whether you have to freeze the shares or you want us to freeze the shares.
I replied:
I was reliably informed that demat shares in a specific account can be frozen by the depository on request from the holder of the shares. In your case (Upstox), I assume the depository would be CDSL. I also believe this is a standard procedure, so I’m not sure why there is confusion about it.
Doing a net search brings up this article, which seems to cover the
issue adequately -Business Financial, Economy, Market, Stock - News & Updates | The Hindu BusinessLine. I would like to know the details of this procedure from your end. Do I need to fill in a form? If so, could you send me that form? Thanks in advance.
Upstox:
I would like to inform you that the article which you have shared is of 2003 and it is not reliable as it is all about NSDL.
If you need correct information you can visit CDSL website and as a broker we have also informed you that without your request we never freeze the shares.
I replied:
what I’m asking if you freeze shares for share owners, or do I have to deal directly with CDSL? If so, what is the procedure?
Upstox:
We are sorry to inform you that we don’t freeze any of the shares of the customers
Me:
Ok. So to be clear, if I want to freeze my shares, I have to go through CDSL directly?
and then finally Upstox:
Sorry for the miscommunication in above mail. As confirmed with our Demat team you can freeze the shares but as per the rules and norms we need a specific reason for the customer end for freezing the shares.
<Sigh.> This was a simple question. All they had was reply to my initial request with - to freeze shares, you have to submit this form (and attach the form). But as you can see, they did not do that. And my replies were perhaps not very good, but regardless, it wasn’t necessary to have so much back and forth over nothing. I also left out some of the more useless replies.
F for appalling customer service and general imbecility. Would you want to depend on these people if you had a real problem?
INCIDENT 2
They accidentally billed me twice for the opening fee. I should mention that I created my account in so-called offline mode, because I didn’t want to use an Aadhaar card as identification. However, I think I still wound up filling in some form online as well. And I was billed twice once in online mode, and once in offline mode.
Anyway, this is not important. What’s important is that the company made significant difficulties in returning the money. They asked me for a copy of the transactions from my bank records. To quote myself:
I spoke to someone on the phone from Upstox who said to send a photo of the page of my passbook that contained the entry for the check payment.
None of this made any sense, because they should have been able to see the transactions on their end. But apparently they are incapable of keeping their own records.
I had already earlier sent them all the details of the two transactions that corresponded to the payment of two duplicated fees (one of them might have been a check), but that wasn’t good enough for them. They wanted a scan of my passbook.
In any case, I blacked out transactions other than the relevant ones with Upstox from the page and sent it to them.
I then got a response that:
We are sorry to inform you that, the bank statement which you have sent us is not acceptable as the details are been hidden on the bank statement.
So, either provide us the cheque number and bank name of the cheque which you have sent us and provide us the proper bank statement.
So at this point I told the rep to go to hell, and tried to find someone else to talk to. After some more wasted time and back and forth, they eventually said they would refund the amount to me, but I’m not sure they did.
This last one was the worst.
INCIDENT 3
I started receiving calls from Upstox, telling me that they were going to give me free stocks, worth Rs. 100 or something. But obviously they needed me to agree to it. This happened a few times, and I kept telling them to go away. Eventually they stopped, but then I realised that they had gone ahead and deposited stocks in my account without my permission. I think this was all so that they could increase the number of their active accounts.
I just checked my account, and there are two shares of something with the description “ICICIPRAMC - BHARATIWIN”, which is probably ICICI PRU MF BHARAT 22 ETF/ETF, NSE: ICICIB22. The current value is around Rs. 52. Transaction date is 13th August 2019.
I had nothing to do with this transaction, which probably makes it illegal. I wonder if I should complain to the NSE or someone. Though they are technically probably allowed to do this, based on the POA I signed for them. Opinions?
If Upstox was trying to persuade me that it was a bad idea to trade with them, they could not do better than engage in such unauthorized and annoying activity.
SUMMARY AND TAKEAWAY
After these experiences, I’ve come to think that it is probably better to just avoid Indian discount brokers. The numbers just don’t add up. For the price they charge, they can’t really afford anything resembling real customer service, and these people at least don’t seem overly concerned with following proper procedure either.
Granted, the kind of thing I’ve described is probably fairly mild by Indian standards, but it’s important to remember that brokers have a great deal of responsibility involving large sums of money. It’s an important job, and not a good area in which to be dealing with iffy people.
I know that many people do use discount brokers, and seem satisfied with them, including people on this thread. Though most people seem to use Zerodha, which may be better. But I don’t feel encouraged to experiment further.
I still think that the current “standard” corporate brokerage rate of 0.5% + 18% GST is too high as a flat rate. It might be ok to smaller amounts, but not as a flat rate. But it’s probably possible to negotiate with the brokers somewhat. Something at 0.25% or so should be considered good, I think.
Also avoid signing POAs. They’re a bad idea and there are alternatives. I’ve said that elsewhere too.