Online investment platform Groww Invest Tech has settled a regulatory case with the Securities and Exchange Board of India (SEBI) by paying Rs 47.85 lakh, resolving allegations related to violations of stockbroker regulations and other compliance lapses.
The matter originated from a detailed inspection of Groww (formerly known as Nextbillion Technology Pvt Ltd), where SEBI found several breaches of the Securities Contracts (Regulation) Rules, relevant SEBI circulars, and broker conduct regulations.
In its settlement application, Groww opted to resolve the case "without admitting or denying the findings", in line with SEBI's standard settlement framework. With the settlement terms accepted, the show cause notice issued by SEBI on November 25, 2024, has now been formally closed, said Adjudicating Officer Amit Kapoor in the order, as per a PTI report.
Among the key observations, SEBI noted that Groww had issued retention statements to clients containing incorrect information, including mismatches between ledger balances and margin obligations in 38 instances. Additionally, the platform was offering non-securities services, such as UPI payments and utility bill payments, via its trading application, which SEBI flagged as a potential source of financial risk for users.
Further, the company was found to be non-compliant with SEBI’s Business Continuity Plan norms, conducting annual reviews instead of the required half-yearly assessments. SEBI also cited gaps in Groww’s trade surveillance framework, particularly concerning the evaluation of client financial capacity and the updating of income-related data.
Revised Settlement Terms
Following the regulatory notice, Groww submitted revised settlement terms, which were approved by SEBI, allowing the matter to be concluded upon payment of the penalty. However, SEBI has retained the right to reopen the proceedings if it later finds that full disclosures were not made or the settlement conditions were breached.
This is the second settlement by Groww with SEBI in recent days. On Tuesday, the platform paid Rs 34.12 lakh to resolve a separate case linked to an alleged failure in addressing a technical glitch that occurred in January 2024.
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