Is It Safe To Give Stock Brokers Your Bank Details?

About 14 brokers were either declared defaulters or were suspended from exchanges in 2020. Because of the large number of clients and the sum involved, brokers like Karvy Stock Broking Ltd. and Anugrah Stock & Broking Pvt. Ltd. were in the headlines. Others were less well-known and smaller.
Some investors, whose trust has been shaken by brokerage failures, have begun to move to security companies backed by banks, especially those owned by the government.
“Since the popular stock market scams, I have always maintained a broking account with a public sector bank,” says an independent stock analyst who has been advising investors for over two decades. Although the broker can lag behind private brokerages in terms of technology, I believe the chances of default or misappropriation are poor.”
On the other hand, most bank-backed brokerages charge a higher rate. “They are sufficient for those who do not trade daily,” the analysts said. The bank-backed brokerage will be prohibitively costly for intraday traders, futures traders, and options traders.
Many of his long-term investors, he says, have moved to brokerages backed by banks because they feel safer. They believe that big banks that provide broking services are less likely to break the Securities and Exchange Board of India (Sebi) regulations.
If the client accepts delivery, some private brokers (not backed by banks) don’t charge anything or charge a small flat fee. They charge a flat fee (ten or thirty dollars per lot) for intraday transactions, regardless of the deal’s size. When it comes to broking rates, most bank-backed stockbrokers are not as competitive.
Zerodha Broking Ltd, ICICI Securities Ltd, HDFC Securities Ltd, Sharekhan Ltd, and Kotak Securities Ltd, Axis Securities Ltd, Angel Broking Ltd, Motilal Oswal Financial Services Ltd, IIFL Securities Ltd, and SBICAPS Securities Ltd are among the top ten brokers by the number of active clients.

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