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Karvy Scam: Investors of broking company Karvy will now get more time to withdraw their money. Market regulator SEBI has said that investors can make their claims till March 31.
New Delhi. Market regulator Securities and Exchange Board of India (SEBI) has extended the last date for filing claims for investors of bankrupt Karvy Stock Broking Limited (KSBL) to March 2026. Earlier this deadline was 31 December. KSBL was declared bankrupt by the National Stock Exchange (NSE) on November 23, 2020. After this, investors were invited to submit claims against KSBL, the last date for submitting claims was fixed as June 2, 2025.
After declaring the broking company bankrupt, the date for making claim has been extended several times. Following the response to SEBI’s announcement in May 2025, the deadline for filing claims with NSE was extended to December 31, 2025. SEBI said that after awareness and extension of deadline, a large number of investors have filed their claims. In view of this, it has been decided to extend the last date for filing claims to March 31, 2026.
What was Karvy Stock Broking Scam?
This stock broking company of Karvy Group was one of the leading stock broking companies of the country. In the year 2019, it was revealed that the company had taken a loan worth thousands of crores of rupees by misusing the shares of its customers. This step of the company was contrary to SEBI rules and about 95 thousand investors were affected by this step and a total scam of around Rs 2,873 crore was revealed.
How was the scam carried out?
Karvy misused the power of attorney taken from customers. Power of Attorney is a legal permission, which allows the broker to carry out transactions in the demat account of the customers. However, under SEBI rules the company cannot use it for its own benefit. Bypassing this rule, the company quietly withdrew shares from the demat account of the inactive customer. These shares were transferred to the demat account of the company. After this, loans were taken by mortgaging these shares with banks like ICICI, HDFC, IndusInd, Bajaj Finance. In this regard, the company has taken a loan of about Rs 300 crore from Bajaj Finance itself.
The company misused the money
The company transferred the loan amount collected from banks to its own account instead of that of the customers. Not only this, out of this fund, Rs 1,096 crore was transferred to the group’s real estate company Karvy Realty. Apart from this, Karvy created 9 shell companies and did big trading in the name of insurance business. Not only this, the funds were diverted through NBFCs and huge amount of properties were purchased. After the matter came to light, SEBI issued a circular on June 20, 2019, banning the broker from pledging the shares of customers.
