You, the Indian investor, have been pick-pocketed, stolen from, mis-sold, cheated and defrauded in all kinds of scams perpetrated not by knife-wielding muggers but white-collar criminals who bend, twist and totally escape from regulatory norms that are meant to protect you. A mapping of the big money vanishing tricks of the past two decades points a finger at systemic regulatory failure to protect household savings.
As the Indian economy opened up, the regulators were set up to develop the market and protect the investors. However, the development role, along with turf wars, has taken precedence over its protection role and India has found its regulators repeatedly asleep at the wheel, costing the household its savings again and again (see graph). The latest season of the loot story has Karvy Stock Broking Ltd dipping its fingers into your money and using your shares to borrow money for its own use. Why have the regulators failed investors in India? The answer to this question is a mix of politics, power, capture, hubris and incompetence.