'The tricky thing...': Zerodha's Nithin Kamath opens up on the challenges of working with India's regulators

Zerodha’s Nithin Kamath didn’t mince words on the challenges while being part of regulatory committees. In a post on X, Kamath stressed on what brokers and regulators face in today’s hyper-reactive environment, where even the smallest issue can blow up. 

“One challenge in today's media-saturated environment for brokers like us and also regulators is the sheer noise because even small things can be blown out of proportion,” he said.

Kamath, who’s part of various regulatory committees, expressed admiration for SEBI’s consultative approach. "What has always amazed me is the consultative approach that SEBI has taken over the years. No regulation is passed without hearing from the industry and other experts." This, he believes, has helped cement India’s capital markets as among the safest globally, if not the safest.

But Kamath’s post wasn’t just about giving regulators a pat on the back—it highlighted the tricky tightrope act of balancing consumer protection with industry interests. “For regulators, consumer interest comes first. The tricky thing about being on these committees is that you have to do what is in the best interest of the customer, even if it may not be right for the industry at times,” Kamath admitted.

Kamath in a recent podcast had acknowledged that while running a broking firm is already tough, the idea of transitioning into banking, which was something the firm was mulling, is even more challenging. Yet, Zerodha is still exploring the possibility. As India’s largest stockbroker, the company has ambitions to expand its financial services, and Kamath views the potential move into banking as a natural progression. 

However, the regulatory landscape and stringent requirements mean this will not be an easy journey.

Despite the hurdles, Kamath remains optimistic. Zerodha’s vision for the future includes creating a more collaborative ecosystem between regulators, entrepreneurs, and the government. He stressed the importance of working together to foster innovation and growth in the country’s burgeoning startup landscape. "The tricky balance lies in doing what’s right for the consumer while keeping the industry robust. But collaboration is key,” Kamath said.