Dabba Trading: Illegal way to invest in Share Market, details here- Watch Video

Every investor wants to take advantage of the boom of the stock market. Fraudsters understand this very well and take advantage of it. Dabba trading is one of the frauds in the name of stock market. In this, traders are trapped by luring huge returns and in the end these traders have to bear heavy losses.

One such case came to the fore in Mumbai on Thursday, in which there was a turnover of about Rs 4672 crore from March 2023 to June 20, 2023 in illegal trading. In this, due to non-receipt of tax and fees, the government suffered a loss of about Rs 2 crore. Let us understand what is this dabba trading, who does it and what are its disadvantages?

What is Dabba Trading?

Dabba trading is an illegal method of trading in stocks of companies in the stock market. In this, deals are not done on the stock exchange. The people doing the deals are unauthorized. These people are neither members of any exchange. Nor are there brokers registered with the market regulator SEBI.

In dabba trading, the trading ring operators get the equity traded illegally outside the stock exchange platform. They make an app by giving the greed of fixed returns. Then they transact money through hawala so that they can be saved from the eyes of income tax. People think that they are investing money in the stock market. But in reality it is a fraud.