Protecting investors and savers

Can the banking regulator consider introducing a ‘check tool for all online deposit transactions?

- TAMAL BANDYOPADHYAY

After a gap of two months, dematerialised (demat) account opening picked up in October.

Three million new accounts were added that month, taking the total to 210.06 million.

In July, close to three million new demat accounts were added, recording the highest monthly increase since December 2024. The highest-ever monthly addition was in January 2024 -4.68 million.

The number of unique investors has crossed 135 million — more than three-and-a-half times of where it stood in the financial year 2019 (FY19), indicating their confidence in our markets, Securities and Exchange Board of India (Sebi) Chairman Tuhin Kanta Pandey recently said. However, despite the increasing number of unique investors, markets are still not an attractive investment avenue for many.

A recent Sebi-led nationwide survey, covering some 90,000 households across 400 cities and 1,000 villages, highlighted this. About 63 per cent of Indian households (some 213 million families) are aware of at least one securities product, including mutual funds, shares, exchange-traded funds, and derivatives. Yet, only about 9.5 per cent of them, about 32 million families, invest in markets.

Urban participation is significantly higher, about 15 per cent, compared with 6 per cent in rural India, illustrating the divide in financial access and approach. While unique investors have been on the rise, at least 85 per cent of Indian households still remain on the sidelines.

Yet another finding was that investor knowledge is still limited. Only around 36 per cent of active investors show a moderate understanding of market products and risks. This knowledge gap poses a risk, making investors vulnerable to potential losses and fraud.