Karvy crisis: What clients should do with holdings in their demat accounts

If demat holdings are intact, then Karvy's clients have the option to move to another broker. If not, they should complain.

A November 22 ex-parte interim order by the Securities and Exchange Board of India (Sebi) banned Karvy Stock Broking Limited (KSBL) from taking on new clients. It also barred the broker from using its power of attorney (PoA) to withdraw shares from clients’ demat accounts. Besides causing fear among clients that their securities may have been misused and they may suffer losses, the incident is also causing inconvenience as clients are finding it difficult to transact.

What happened: From a reading of the interim order issued by Sebi, it appears that KSBL pledged its clients' securities with banks and NBFCs to