Have a Demat account in Karvy Stock Broking? Alert! Ban imposed, save your money now, do this immediately
SEBI has banned Karvy Stock Broking from executing its client's trade putting around 2.5 lakh Karvy customers in limbo.
On 22nd November 2019, the Securities and Exchange Board of India (SEBI) passed an order against Karvy Stock Broking Ltd that prohibits the broking firm from taking any new clients. SEBI also directed two of its depositors — CDSL and NSDL from honouring the Karvy Stock Broking Ltd's instructions. This strong order from SEBI came after a series of violation of its norms by the stockbroking firm that includes the transfer of client's shares into its own account and pledging it in the open market to raise money. This SEBI's order has put around 2.5 lakh clients of Karvy Stock Broking Ltd. in limbo as they are concerned about their shares lying into the Demat account they opened with the Karvy Stock Broking firms. Those who don't have shares but money or those who have both shares and money in their Karvy Demat Account are also looking for the ways to fish out their shares and money.
Speaking on what should be the immediate course of action that a Karvy Stock Broking client should do, Prakash Pandey, MD & CEO at Plutus Advisors said, "Those who have shares in the Demat account they opened with the Karvy Stock Broking Limited should open a new Demat Account and once that new Demat Account is opened, they should immediately transfer all the shares lying in the Karvy Demat Account and close their Karvy Demat Account." Pandey said that it will require some lengthy paperwork process but one should not lose one's patience as their little negligence would lead to huge losses of both shares and money.
See Zee Business Live TV streaming below:
Speaking on the Karvy clients who have both shares and money lying in their Karvy Stock Broking Ltd. Demat Account, Pandey said, "For those who have money lying into their Karvy Demat Account should immediately transfer that money into their bank account if they are an online Karvy customer. If they are an offline Karvy customer, they can visit their branch and ask for the payment through money transfer order either into their bank account or through cheque, whichever suitable to them. However, Pandey went on to add that F&O (Futures and Options) trades will not be directly affected by the recent SEBI order, but if the Karvy Stock Broking Limited fails to maintain the margin with the exchange, in that case, all position in the F&O will be squared off by the exchange — a loss that the Karvy Stock Broking firm's clients will have to bear.
"According to the SEBI 2009 norms, all non-utilised funds lying into the Demat Account of a client has to be transferred into its bank account once in every 90 days by the broking firm. In case, your 90 days limit is not over, you should not wait for that and immediately ask for the money transfer into your bank account," said Pandey.
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.