Dabba Trading: What is Dabba Trading, NSE warns investors about
In the statement released by ‘NSE’ in this regard, names of some organizations and individuals doing dabba trading have also been given. In it Shri Parasnath Commodity Pvt. Ltd., Shri Parasnath Bullion Pvt. Ltd., Ferry Tail Trading Pvt. Ltd. and Bharat Kumar. None of these are registered with us. A police complaint has been lodged against them. NSE has also appealed that the investors should not invest with the above persons or institutions.
How does dabba trading work?
– These types of transactions take place in the fake stock market. These markets have their own distinct rules.
– These stock markets are illegal and unregulated.
– The companies doing these transactions are not registered with the stock market regulatory body ‘SEBI’. Transactions are done in cash only.
– Purchase and sale of companies registered in stock market and futures market are done.
– The intermediary doing this transaction pretends to be a stock broker. Those transactions are recorded in their own trade book, showing that they are investing in the stock market. In return money is extorted from willing investors.
– The intermediary deals with the assumption that some people will gain, others will lose.
– This intermediary, however, invests in the official stock market. He gives returns to the investor according to the profits and losses therein.
– If the middleman loses continuously, he closes the business and runs away.
– There is no guarantee that transactions made through this medium will be completed. Investors have a great fear of losing their money in this.
Why is it done?
– Dabba trading is completely illegal.
– Therefore, the income received from it is not taxed.
– Despite the risk involved in bin trading, there is still plenty of money to be made.
Why is it banned?
– Dabba trading is banned in India.
– This trading is done through private persons and according to their rules.
– Transactions in this way are done outside the stock market.
– It is banned as it is considered as gambling by ‘SEBI’.
– There is no record of such transactions.
turnover forecast
– Since there is no official record of the dabba market, one has to rely only on guesswork.
– According to some analysts, the turnover of this market should be higher than the official stock markets.
– Experts estimate that Dabba Market’s investment in shares should be around Rs 70 thousand crores.
– Futures market and others combined, this turnover is estimated at Rs 1 lakh 30 thousand crores.
