Rolling settlement is to be implemented from July 2. Sebi will take up next week the fate of the carryforward system or badla. A Sebi panel has also recommended a ban on badla. A handful of individual operators did indeed misuse a system which permits rogues to rig prices by buying huge quantities of shares by paying margin money. No system is foolproof.
Scams happen all the time.
If Britain had a regulator who thought like Sebi, derivatives trading would have been banned. The badla mechanism facilitates financing of money or shares within the system. There is empirical evidence that it facilitates an increase in volume. A buyer or seller is not required to settle the trade in the market immediately at the end of the settlement. Delivery-based trades in India account for a small percentage of total trades.