Investors of Karvy Stock Broking Ltd (Karvy), who had filed claims with the investor protection fund (IPF) of National Stock Exchange (NSE), have started receiving their money back within a fortnight after processing of claims began. Some investors, who have joined Moneylife Foundation's Telegram group have posted messages to share the news.

NSE sources tell us, "We have expedited payments significantly and also made it easier for investors by sharing information proactively to shorten the claim process." On an average, claims are being paid within 12 to 13 days after complete documentation has been submitted.

However, we have observed from Moneylife's Telegram help group for Karvy investors that most people are struggling to understand the process and to file proper documentation.

According to NSE sources, "We have received about 5,200 odd claims up to now of which up to 1,900 had some deficiency. Around 2,000 have been processed and balance are in the pipeline. About 900 are eligible out of above and most, barring a few have been paid. Total paid amount is about Rs24 crores until now".  

Many investors have also reported rejection of claims. Many of these pertain to shares that have been held in pool accounts and there have been no transactions on the exchange and hence, a claim from the Investor Protection Fund is not tenable under its rules.

There are over 480 people on Moneylife's telegram group and it is clear from their feedback as well as numbers available from the exchange that a large number of people will not be eligible for any compensation (or full compensation) from the Investor Protection Fund. Many of these may have to consider legal action against Karvy, which continues to have several group companies operation as market infrastructure institutions or intermediaries.

Although C Parthasarathy, founder chairman of Karvy had initially promised to repay investors and make arrangements for funds, there have been no payments since October. However, Karvy had made part payments  and some transfers before that period to nearly 90 odd investors, before being expelled from the exchange.

Over the past months, Moneylife Foundation has organised two webinars with officials from the NSE's Investor Services Cell (ISC) and the National Share Depository Ltd (NSDL) to help people understand filing processes, where to get data, how to transfer balances from Karvy to other Depository Participants and understand eligibility. (Read: NSE Officials Guide Investors on Filing IPF Claims)

OP Agarwal, an investor of Karvy says, "NSE has transferred Rs16**** against claim, ledger balance of Rs18**** in 15 days. Only futures & options (F&O) Trade. Date of last trade is 27 November 2019."

Another investor Aleem shared message he received from his bank. The message says, "INR1***** credited to your A/c No XX**** on 01/01/2021 through NEFT with UTR CMS********** by NATIONAL STOCK EXCHANGE INVESTOR PROTECTION FUND T, INFO: NATIONAL STOCK EXCHANGE INVESTOR PROTECTION FUND TRUST."

IMPORTANT NOTE

Moneylife and Moneylife Foundation have done what we could for investors of Karvy. The group on Telegram was closed since none of the 1000+ members wanted to become admins when Moneylife Foundation wanted to stop being in charge. We have done the best we can in terms of hand holding and guidance. Investor/s now need to get together and go to court or SAT.