Produced by: Manoj Kumar
Yes, Indian brokers can go bankrupt—but strict SEBI rules make it rare. When it does happen, panic spreads fast among unsuspecting retail investors.
Your stocks are stored in NSDL or CDSL—not with the broker. So, even if your broker vanishes overnight, your shares stay untouched and legally yours.
Client money must be kept separate from broker funds. This SEBI mandate blocks misappropriation—at least in theory—if your broker runs out of cash.
Mutual funds aren’t tied to your broker. They’re held with AMCs. If your broker collapses, your SIPs and NAVs keep ticking.
When a broker fails, depositories step in. Your demat holdings can be ported to another broker—if you act quickly and follow the official process.
Money stuck in your trading account? It should be refunded, but delays happen. That’s when you file a claim and start chasing recovery.
SEBI’s Investor Protection Fund offers compensation for broker defaults—up to ₹25 lakh per client. But claims must be filed within three years.
Watch for withdrawal delays, trading glitches, or poor customer service—they’re often signs of deeper financial trouble in a brokerage.
Keep records. Stay alert. If your broker’s name hits the news, call CDSL/NSDL, initiate transfers, and prepare to claim. Time matters more than you think.