1. Why do investors get involved in dabba trading in spite of the many risks involved?

Most of the individuals in the stock market are attracted towards dabba trading because of their expectations to make quick money. They are drawn by the lower transaction costs, tax evasion, high leverage, and ease of access over the legal channels. However, they are often unaware of the Dabba Trading risks and legal consequences related to the same.

2. How can I identify dabba trading?

p>You can identify the dabba trading when the brokers are working outside the exchanges and are charging a lower brokerage fee and giving a higher return than expected. They will also ask for payment in unconventional ways and may not involve paperwork, contract notes, and a Demat account, which are clear indications of dabba trading.

3. How is Dabba trading different from the legal stock market trading?

In legal trading, the transactions are made through official stock exchanges, the dealings are recorded and regulated by SEBI, there is actual ownership of securities, there is legal protection and a grievance redressal mechanism. On the other hand, Dabba trading occurs off-the-books, without regulatory protection, and involves betting on prices rather than ownership, and provides no legal protection.

4. Can I recover my losses in trading dabba?

Recovering investments lost in dabba trading is extremely difficult as it is an illegal, unregistered and unregulated form of trading. Because these transactions don't take place on recognised stock exchanges, investors have no regulatory protection to fall back on.

5. What is the role of SEBI in curbing the practice of Dabba trading?

SEBI has declared dabba trading illegal and is also taking stringent measures to curb this activity by collaborating with law enforcement to identify and penalise brokers involved in such activities. SEBI's surveillance systems help spot suspicious trades, and its enforcement arm levies fines, cancels the licenses or bans the offenders.