May 17, 2004 was a black day for the Indian equity market. The stock market nosedived as investors, shell-shocked by the result in the national election, sold stocks. But for G N Bajpai, chairman of the Securities and Exchange Board of India (SEBI), India’s market regulator, it was a day of victory. “What happened on that day was unfortunate and should never have happened, but our risk management systems passed a crucial test. There was no payment default on the stock exchanges the next day even though the payout was several times larger than what caused the last market crisis,” says Mr Bajpai.
Having worked with India’s largest life insurance company for 36 years, and rising to become its chairman, Mr Bajpai has a nuts-and-bolts understanding of the workings of the securities markets. Since he took over as head of the market regulator in February 2002, SEBI has strengthened its surveillance and monitoring systems, and is strict in enforcing rules, even punishing large foreign brokerage firms.
