What Is Dabba Trading? Allegations Against TradeBazaar Explained

Dabba trading is an illegal form of stock market trading that operates outside the official exchanges like NSE and BSE. In recent months, the term has resurfaced in public discussions after allegations against TradeBazaar, with investors claiming blocked withdrawals and unaccounted trades. This article explains what dabba trading is, how it works, and why platforms like TradeBazaar are facing scrutiny.

What Is Dabba Trading?

Dabba trading refers to off-the-books trading where brokers execute trades internally without routing them through registered stock exchanges. Instead of placing orders on NSE or BSE, transactions are recorded in a private ledger, often called a “dabba” (box).

Since trades are not officially registered:

• No exchange records exist

• No regulatory oversight applies

• Investors have no legal protection

This practice is illegal in India and prohibited by SEBI.

How Dabba Trading Works

In dabba trading, a broker or platform acts as the counterparty to the trade rather than the market itself.

Here’s how it typically operates:

1. Investors deposit money into a trading platform

2. Trades appear to be executed on an app or dashboard

3. In reality, trades never reach the stock exchange

4. Profits and losses are adjusted internally

If the investor makes profits, the broker pays from their own pocket. If the investor loses, the broker keeps the money. This model creates a serious conflict of interest.

Why Is Dabba Trading Risky?

Dabba trading carries multiple risks for investors:

• No legal recourse if funds are lost

• Withdrawals can be blocked at any time

• Prices can be manipulated internally

• Sudden shutdowns of platforms are common

Because the trades are unofficial, investors cannot complain to SEBI, exchanges, or courts easily.

Allegations Against TradeBazaar

TradeBazaar has recently come under fire after multiple investors alleged that:

• Deposits were accepted smoothly

• Profitable accounts faced withdrawal delays or blocks

• Customer support became unresponsive

• Users were pressured to add more funds

Some investors claim that once they started making consistent profits, their accounts were either restricted or flagged for “verification,” with withdrawals remaining pending indefinitely.

Is TradeBazaar Involved in Dabba Trading?

As of now, TradeBazaar has not been legally proven guilty of dabba trading. However, the allegations raised by users show patterns commonly associated with dabba trading platforms, including:

• Internal trade execution

• Lack of transparent exchange order IDs

• Absence of SEBI registration clarity

Regulators generally advise investors to verify whether a platform is registered with SEBI and linked to official exchanges before investing.

What Does SEBI Say About Dabba Trading?

SEBI has repeatedly warned investors against dabba trading. According to the regulator:

• Any trading outside recognized exchanges is illegal

• Entities promoting such platforms may face criminal action

• Investors participating knowingly may also face penalties

SEBI regularly cracks down on illegal operators, but many platforms continue to operate digitally, making detection harder.

How Can Investors Stay Safe?

To avoid falling into dabba trading traps:

• Trade only through SEBI-registered brokers

• Check exchange order numbers for every trade

• Avoid platforms promising guaranteed profits

• Be cautious of aggressive referral schemes

If withdrawals are delayed repeatedly, it is a major red flag.

Conclusion

Dabba trading remains one of the most dangerous and illegal practices in India’s financial markets. The allegations against TradeBazaar highlight the importance of due diligence before investing online. While investigations and confirmations take time, investors should prioritize safety, transparency, and regulatory compliance over quick profits.

Staying informed is the first step toward protecting your hard-earned money.