Hyderabad: Several private sector banks that have exposure to Karvy Stock Broking may be in trouble following the market regulator Sebi unearthing a Rs 2,000 crore fraud at the firm.
Private sector lenders ICICI Bank, HDFC Bank, Axis Bank and DCB have exposure to Karvy Stock Broking.
ICICI had given Rs 875 crore loan to Karvy Stock Broking, HDFC Bank has an exposure of Rs 200 crore, Axis Bank has an exposure of Rs 85 crore, DCB Bank has an exposure of `55 crore and IndusInd Bank has an exposure of Rs 105 crore.
There were payment defaults occurring at Karvy Stock Broking and its clients filed complaints with the Prime Minister’s Office (PMO), the Finance Ministry and Sebi. The unauthorised use of clients’ funds creates a serious doubt over the conduct and integrity of KSBL, said Sebi.
According to media reports, one of the major reasons for Karvy’s downfall is its rapid diversification. In the last 10 years, Karvy entered into a slew of businesses including telecom record management services, data analytics, and manufacturing of smart IT devices and consolidated all domestic voice business under Karvy DigiKonnect Ltd. Last year, it acquired HCL Services Ltd....