New Delhi, Apr 3 (IANS): At total of 32 brokers have been declared defaulters by the NSE during the last five years, the Parliament was told on Monday.

Market regulator SEBI, along with the exchanges, conducts regular inspection of brokers based on certain criteria and takes action as per its regulations and bye-laws of the Exchanges, Minister of State for Finance, Pankaj Chaudhary told the Lok Sabha in a written reply.

As per the SEBI's orders dated November 22, 2019 and November 24, 2020, securities worth around Rs 2,000 crore and belonging to 82,559 clients were transferred to fully paid-up clients of Karvy Stock Broking Ltd (KSBL).

NSE and BSE have suspended trading terminals of KSBL with effect from December 2, 2019 and declared it as a defaulter on November 23, 2020. Further, based on the findings of forensic audit report and observations of the NSE, the SEBI has initiated enforcement action against KSBL, its directors, its CEO and against two group companies of KSBL under its relevant Regulations, said the reply.

The claims of investors in the matter are being dealt with and settled by NSE as per its bye-laws. As on March 20, 2023, an amount of Rs 414.24 crore has been paid to 34,497 clients from Investor Protection Fund (IPF) of the NSE. The NSE, along with other MIIs has also monetised the mutual fund distribution business of KSBL and funds amounting to around Rs 150 crore have been realised and the same is being utilised for distribution to the clients of the KSBL, added the reply.