It isn’t that brokers fail to mention this, but more that most brokers don’t offer this. This is because you could potentially sell stocks on the broker’s platform and then move the stock out of your demat account elsewhere. This opens up the risk of short delivery which brokers would want to avoid
Hi @Nikhil.A,
Thank you for your comment.
Yes, it may be true that most brokers do not offer this option, though they should. And if the online delivery method has issues, those issues should be addressed. See below.
However, it would still be the responsible thing for a broker to say - this option exists, but we don’t offer it.
And as I mentioned in my earlier message, three different brokers didn’t mention the existence of this option to me, or mention it in their documentation (which I read), though when I asked them about it, they said they were ok with it. Although Standard Chartered made noises about how it was much less convenient than the POA approach. But of course everyone knows that security and convenience are inverse to each other. You can have one or the other - you can’t have both.
I also read somewhere that this can be addressed by giving your broker the ability to temporarily put a hold on shares, but not remove them from the account. I’m not sure how that would work, or even if I understood this correctly. I don’t have a link to hand, but might be able to dig one up if anyone is interested. But none of the three brokers I mentioned expressed concerns of the type you mentioned.
In any case, the correct response to the risk you mentioned (“could potentially sell stocks on the broker’s platform and then move the stock out of your demat account elsewhere”) would be to find a suitable technical solution to safeguard both the interest of the investor and the broker. The correct response isn’t to just stay with the POA option, because this is clearly a very suboptimal option on multiple grounds.
Also, doesn’t the scenario of the type you mention constitute fraud of some kind? Presumably if that happened once, that broker would no longer be willing to do business with you. And couldn’t you be blacklisted by the exchange or something? There certainly seems like there would be room for some kind of legal or regulatory action here.
Additionally, I think the issue also applies to the “traditional” delivery instruction slip, which is a service that most, if not all brokers provide, because they always give clients a slip book. Every brokerage account I’ve ever seen has a slip book associated with it. And the client has to hand in a delivery instruction slip after the trade has been completed.
Broker may refuse to do business with you, but you can go to another broker and do the same thing again. Exchanges will not bar you because this is technically not fraud. The broker is expected to deliver shares to the exchange. Exchange doesn’t care if you didn’t have them.
Agreed, however that increases the complexity of the onboarding process, everyone wants simplicity in the onboarding process. Our markets are already very shallow, and people don’t have enough attention span to sit though and read all available options, much less ones that aren’t even offered.
Again means nothing if the shares aren’t delivered on time. The short delivery at the exchange is the broker’s obligation, no the client’s.
This has already been done. See the post above about CDSL TPIN.
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Guys, I want to know your views on sharekhan/ hdfc securities/ discount brokers (like zerodha, upstox) - which broker would you recommend as the preferred option to hold stocks for long term investing?
Thanks in advance!!!
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I have been using angel broking (friend’s recommendation) for the past 24 months. App as well as the website doesn’t allow me to place GTC or GTT orders because of which I lost heavily recently. A stock lost 30% of its value in matter of minutes. Is there any trustworthy broker, who provides GTC feature that works perfectly?
Recently I had a negative experience with Upstox. They deducted some Money from my Back AC with no reason. Their Phone helpline was not available to talk to, possibly due to COVID-19 lockdown. I could only raise the case with them with much difficulty. They did give some invalid reasons for deducting the Money initially, but after making noise they did return my Money. This took more than 1 Month. However they have not given any reason yet for deducting the Money. Has anyone had any bad experience with Upstox?
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They deducted money from your bank account? How did they manage to do that? How did they get access to your bank account?
What reasons did they give you?
Motilal Oswal provides GTC. Been trading with them for more than 2 years now. No issues.
Edit: I now work for Motilal Oswal.
So I don’t/can’t trade anymore.
So 
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Recently I faced an issue with ICICI direct 3 in 1 ac, that some shares are missing from demat ac. Although raised the issue with them but no response.
Can some one help me with the escalation authority in sebi to resolve the matter.
Thanks in advance
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I have an account with Upstox for last 18 months. I did not give them PoA. I was using eDIS PIN generated by Upstox to sell the shares. From Jun 01, the eDIS PIN has started getting generated by CDSL instead of Upstox. This has led to freezing of my ability to sell shares.
This is because the CDSL eDIS PIN can only be generated if the underlying Demat account is in single name. My Demat account is in joint name. So I am stuck.
For first 20 days, neither Upstox, nor CDSL even recognized that there was a problem. CDSL said contact DP. Upstox said, use incognito mode, update browser, update App, wait for working hours, wait for Monday and so on. Eventually, I wrote over 50 emails with screenshots of errors and then it was discovered that eDIS PIN cannot be generated for joint Demat accounts. It seems no one anticipated this fall out at the time of implementation.
I complaint to SEBI on scores that my ability to transact has been stopped without giving me prior notice. CDSL says that they have implemented the system as is with consent of SEBI. Upstox says have a single name Demat, give Power of Attorney or take account elsewhere. Upstox is not willing to consider adopting “Easiest”. CDSL has no answer as to why shares can be transferred from joint Demat accounts through “Easiest” but not through eDIS PIN. SEBI will take its 30 days. Markets are rising, I want to lighten up and I am stuck.
Keep this in mind if you plan to open a joint Demat account without giving PoA.
Trust me, it was extremely frustrating that despite sending clear screenshots of error messages, the replies of CDSL and Upstox were copy paste of “Contact DP”, “Click Here”, “Try Tomorrow” without reading my emails as if it was a bot answering the questions. Finally I had to start my emails with capital letters stating “CAUTION-DO NOT GIVE FOLLOWING SOLUTIONS”. Yet for a few days the solutions were same “Contact DP”, “Update App”. God only knows how the matter eventually seeped up to the right level and this bug masquerading as feature was discovered. Of course God’s help stopped there. No solution till now.
Lastly, keep in mind that through eDIS, upstox was allowing only selling worth 20 lakh a day. I guess now it has been raised to 75 lakhs after shift to CDSL eDIS. I am not so sure of this last development. So in case of a situation like second week of march, if you want to sell everything, you will be stuck.
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I have given them PoA for the access to my account for debit in case I do the Trades, which they used to debit my account for no reason.
The reasons they gave initially was that I did the ‘add funds’ from the App (Which I had not done). They kept repeating this few times, back and forth over mails, till I had not options but to give them the warning that i will have to report this as a possible fraud incident to SEBI. Only then they started looking into it seriously. It took long time for them to realize the actual problem, much longer for solution. And till now, they have not given me real root cause why it was deducted from my account at the first place.
[This was deleted from the thread I originally posted it on, because it was deemed off topic. I spent a lot of time writing it, and I think it has useful information, so I’m reposting it here, slightly adapted. I wonder if it will get deleted, again - we’ll see.]
Hi @alexander,
I faced the same question recently. The standard commercial rate is 0.5%. With an additional 18% GST, that is around 0.6. Transaction and securities taxes add around 0.1%. So one is looking at 0.7%. I agree that is expensive.
Here is what I did. NSE has a list of complaints by broker - https://www1.nseindia.com/invest/content/arbitration_reports/report_1c_2019_20.htm
You can download this as an Excel file (see link at bottom) and do some analysis on it. From Excel you can covert to CSV or TSV, and from that import into an RDBMS like SQLite or PosgreSQL, or just use Python Pandas or R.
I think selecting a broker isn’t that different from selecting a company to invest in. There are two important fields to look at here.
-
UCC OF ACTIVE CLIENTS
-
PERCENTAGE OF NUMBER OF COMPLAINTS RECEIVED AS AGAINST NUMBER OF ACTIVE CLIENTS
I’d do a sort on these two fields.
You want a brokerage with a reasonable number of clients. And you want that percentage to be low. Somewhere around 0.01% is good. Then the other thing to check is whether the broker has a local office. It’s even better if their main presence is local. So you go over there if you have problems. Also, you can only use delivery instruction slips if your broker has a local presence. If it passes these preliminary filters, see if you can find people saying bad stuff about them online. If not, call them and ask what kind of brokerage charges they are willing to offer.
Incidentally, after I did this, I found an article online which also suggesting looking at NSE’s complaint record. I can’t remember where that article is, though.
I did this and tentatively settled on Prabhudas Lilladher, who have their head offices in Bombay, at Worli. They have a reasonably low complaint rate - in that list I sent you they have 5 for the year. And they offered me a low brokerage rate. I didn’t know anything about them when I found their name, but it seems they are an old and well established firm in Bombay. However, I’m extremely slow and careful when going through the brokerage application process (some might say neurotic), and they seem to have lost interest in me, and my application currently appears to be in limbo. That’s always a risk with brokers - their perspective on their services is very different from yours as a client. (So don’t take this as a recommendation for PL, since I have not actually used them.)
I think that a lot of brokerage firms, other than the big ones, are desperate for business, so you are likely to get a good rate if you call around.
But just because a brokerage house has a low complaint rate, do not assume they are going to give you good financial advice. As always, be careful. And as I’ve mentioned earlier, I would avoid signing POAs if possible, regardless how reputable you think a broker is.
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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.
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Hello All - I have been using Sharekhan for the last 10 years. No issues so far. I call them to place orders and this happens most of the times and the brokerage is the same whether I place the trade through their app or via a call. I should say the brokerage is very competitive. They first started with 0.25% and now it is lower than that as my volumes has increased and I have been their ‘long term’ customer. Please try using them and if anybody of you had a bad experience please let me know, so I can also be aware of the issues / problems. Just in case, if you need the contact details of the Sharekhan guy I can share it with you over a message. But I understand that their policies are all streamlined across the different branches and they are very prompt. So you can start the account anywhere in India and ask for a competitive brokerage.
I also have an Account with Axis direct, the interface is not so good but the brokerage is a flat 20 rupee per order. If you have a strong conviction about a stock, you can buy 10lakhs worth of shares for 20 bucks and I found that very useful many of the times. Note that you need to have a particular type of account with minimum balance upwards of 75K to avail this flat brokerage. Sometimes the system hangs towards the open / close session, so you should plan your trade in advance (not waiting for the last 30 min of the trade).
I recently started with Motilal Oswal (MOSFL) via a person who was previously working with Sharekhan. So when he started MOSFL franchise, he asked me can I open an account with MOSFL. So far the experience is good. Re mobile App, both Sharekhan and MOSFL are super easy and reliable. Please note for Motilal, my experience is limited for the past 2 months. Hope it helps
Cheers,
Matt
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I do not trade. I just buy and hold for longterm. Since I started 2018 I don’t get any problem with Zerodha… is it good to hold share with discount broker for longer time or better switch to better service provider…
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Yes I thin i agree to a certain extent. As such, in my opinion these discount brokers are good if you are a person more interested in d2d trading without delivery or use of special functions such as freezing the stocks etc. These brokers can give you better margins e.g. not sure how many brokers give you margins on the securities you hold but Upstox does. So in a way these brokers can make a big difference to your trading profits by means of higher margins and lower brokerages. However they struggle when comes to the breadth of sservices such as special needs from different customers, customer service etc.
However in my case, why i chose to try Upstox, even tough I do not do trading (only delivery for long teem investment) is for below reasons:
- Being an NRI, I found that the high profile DPs such as ICICIDirect, HDFC Securities etc charge quite high brokerages (some to the tune of 2% one side).
- I heard that Ratan TATA had an investment in Upstox, kind of indication of authenticity.
- One of my friends had met the Upstox founder few years back and felt its a genuine startup and recommended to me.
- NRI needs a PIS from RBI with which he can open only 1 Demat account (I am not sure how true this is but I was told the same by multiple DPs including ICICI direct).
I am trying to open the Demat with HDFC now (due to the bitter experience I had recently which I mentioned above) which I understand is possible, as against the point 4 above, since my PIS is with HDFC itself, used by Upstox.
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Hi @aspireinvestor,
Thank you for your reply and your thoughts. I don’t have much to add to my previous posting, but some comments follow.
It’s clear that Indian discount brokerages like Upstox are very successful, and so must satisfy the needs of many people. The question one should ask oneself is if it satisfies ones needs. As described in my post, I decided it is not for me. I think I did not specifically mention it in the posting, but the last incident, of Upstox putting shares in my account without permission, was really the deal-breaker. But perhaps it would not affect other people equally. Personally, it makes me very nervous to engage in financial business with people who have such a relaxed view of the rules. Common though that doubtless is in India.
I think a discount broker does make sense for people who trade in large volumes and whose profit margins are thin. I suppose there may be such people in the markets. I don’t think it makes much sense for people who don’t trade in large volumes.
Since margins mean you are borrowing money to bet with, I’m not sure this is actually an advantage. 
Ugh. Are you saying that NRIs get charged specially high rates? That’s terrible if true. Is the Indian govt requiring this, and if not, why are the rates specially high? In any case, I think you should shop around.
I don’t see why this would make a difference, one way or another. Is Mr. Tata going to help you out if you have problems with your broker?
I’m afraid I must be dense, but I don’t see the relevance of this either. Something being a startup is not a recommendation. It just means it is, um, starting up.
This is annoying, but you can have multiple brokers with a single demat account. I do. You can just have a trading account without a demat account. Though it can be useful to have multiple demat accounts.
I’m not sure what “NRI needs a PIS from RBI” means. Is
relevant?
It sucks that the Indian govt puts some obstacles in the path of NRIs. Can you give me a link to good documentation regarding NRI investment in India? It doesn’t affect me personally, but I’m interested.
Can you expand on this one, I could not understand it completely?
Hi @Gaurav_Agarwal,
Thank you for your interest.
This is a reference to an earlier post, which you may not have read. This post is
The relevant incident is ‘INCIDENT 3’. If you have further questions about this, please do not hesitate to ask. Also, that sentence you quoted has an error. I should have written:
but the last incident, of Upstox putting shares in my account without permission…
I realized today while trying to buy INOX leisure shares that Upstox doesn’t allow delivery based buying on stocks which are currently in the ASM list. Are brokers allowed this kind of discretion? Does anyone know how zerodha deals with ASM list stocks, do they also not allow delivery based buying on companies that are in the ASM list?