InvestorQ : What is the latest update on the Karvy case, where they had defaulted on large amounts of retail broking money?
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What is the latest update on the Karvy case, where they had defaulted on large amounts of retail broking money?

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Mary Joseph answered.
1 week ago
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There does appear to be some positive progress for the investors in general and the markets as a whole in the Karvy default case. Exchange has confirmed that the funds and securities worth Rs.2,300 crore of nearly 235,000 investors of Karvy Stock Broking had been settled.

The primary focus of the exchange and SEBI had been the small investor so all fund balances up to Rs.30,000 had been fully settled on a priority basis. Of course, the NSE even confirmed that they were in the midst of initiating regulatory proceedings against Karvy.

It may be recollected that in late 2019, Karvy had been banned by SEBI on grounds of misusing the power of attorney given by clients and NSE/BSE had deactivated all their broking terminals. This had only allowed their distribution and DP business to carry on.

The scam had broken out when it was discovered that Karvy had transferred shares of clients in their custody to a group realty company and then had either pledged or sold these shares. SEBI had instructed NSDL to transfer these shares to the client demat accounts and hence banks had been left with unsecured loans.

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