Zerodha's Nithin Kamath Slams NSE's New Circular: 'Another Blow to Business'
Zerodha to halt brokerage referral programme due to NSE's new circular, Nithin Kamath responds
ZerodhaNseNithin KamathBrokerageReferral ProgrammeReal Estate MaharashtraAug 21, 2024
This move has left Kamath and his team at Zerodha reeling, as they will have to halt their referral programme. 'This is another one of those circulars that will hurt the business,' Kamath wrote on X.
The NSE's new rule has far-reaching implications for brokers like Zerodha, who have built their business models around referral incentives. Kamath announced that Zerodha will stop its referral programme and make one-time payouts for whatever is due. However, they will continue to give out reward points every time a customer refers someone to them. These points can be used to pay AMC or access some of Zerodha's partner products.
Kamath also revealed that 12.4 lakh of Zerodha's customers have referred at least one client to date, highlighting the popularity of their referral programme.
Netizens reacted to Kamath's post, with some praising his transparency and others expressing disappointment with the NSE's decision. 'Very few like you implement these in spirit,' one user wrote. 'There are few brokers who resort to innovative practices like payouts happening from a different entity to influencers and those who directly or indirectly source business.'
Another user added, 'Change is never easy, but I love how you're turning this around with the reward points system. It's cool that there's still value in referring friends, even with the new NSE guidelines.'
About Zerodha
Zerodha is India's largest brokerage firm, founded in 2010 by Nithin Kamath and Nikhil Kamath. The company has disrupted the traditional brokerage model with its innovative approach and technology-driven platform.
Frequently Asked Questions
What is the NSE's new circular about?
The NSE has issued a circular that prohibits brokers from sharing any brokerage as a referral incentive unless the individual referring is officially registered as an authorised person with the exchanges.
How will Zerodha be affected by the NSE's new circular?
Zerodha will have to halt its referral programme and make one-time payouts for whatever is due.
What will happen to the reward points system?
Zerodha will continue to give out reward points every time a customer refers someone to them. These points can be used to pay AMC or access some of Zerodha's partner products.
How many customers have referred someone to Zerodha?
12.4 lakh of Zerodha's customers have referred at least one client to date.
What is the reaction of netizens to Nithin Kamath's post?
Netizens have praised Kamath's transparency and expressed disappointment with the NSE's decision.
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