vible varghese

BY VIBLE VARGHESE

Later. the family moved to Raipur in Chhattisgarh after doctors advised his father to move to a drier place on account of his health.. Raipur. Byron Bazaar. . Mehta studied in Holy Cross Higher Secondary School. where his father was a small-time businessman.He was born on 29 July 1954 in a gujurati jain family of modest means He spent his early childhood in Mumbai (Kandivali).

3 . largest and the most devastating stock market scam.the magician during the rise in the Bombay Stock Exchange in 1992 ---.€ Harshad Shantilal Mehta ---.was also the architect of India¶s biggest.

4 . It acts as a receipt for the money received by the selling bank. € €Ready Bank receipt : It confirms the sale of securities.The two important tools used in this scam are: forward deal: It is in essence a secured short term (typically 15 day) loan from a bank to another bank.

ISSUE BR BR BROKER LENDER BANK FUNDS BORROWER BANK FUNDS 5 .

BORROWER BANK BANK OF KARAD & METROPOLITA N COOPERATIVE BANK (MCB) ISSUED FAKE BRS FAKE BR BROKER HARSHAD MEHTA FUNDS LENDER BANKS SBI UCO STANDERED CHARTERED NHB CANARA BANK GROUP ANDHRA BANK GROUP FUNDS FUNDS RETURNED 6 .

€Stock market : There was a sharp fall in the share prices. Implementation of some aspects of the Narasimham Committee were also delayed.0 lac crores. 7 .1. € Liberalization: SEBI postponed sanctioning of private sector mutual funds. The index fell from 4500 to 2500 representing a paper loss of Rs.

€ First was the phenomenon of tainted shares which created panic in the market € Second was the perceived slow down of the reform process which destroyed the very foundation on which the boom was based. 8 .

€Government¶s € € The concept of tainted shares.knee jerk response to the scam in promulgating the special courts ordinance with several draconian provisions. € JPC € Ban on RF deals 9 . The liberalization policies of the government were put on hold.

should be permitted and the entire settlement and clearing system could have been streamlined and computerized as recommended by Nadkarni Committee. 10 . € €RFs The entire liberalization process could have been brought to a logical conclusion by integrating the various financial markets.

There was a total lack of transparency in the money market. This is the ideal environment for a scam to germinate and grow to alarming proportions. Irregularities of all kind were so common that no suspicion aroused even by highly irregular transactions. 11 .

12 .

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