Scam 1992: An epic tragedy, a story of a man who became the “Most Wanted” from a little figure in a short span. The tale of Harshad Mehta, who changed the dynamics of the country and turned the economy almost upside down. 

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Money sure does make the world go around, but it was something that tickled his fancy for Harshad Mehta. Behind this scum and scam lies ambition, corruption, greed, and the might to toy with a million-dollar system. 

The scam of 1992 was the biggest scam India has ever seen, which caused a market crash by a man almost single-handedly. A man is known as “Amitabh Bachan of the stock market” and “The big bull.” What makes his story even more interesting is that he started with just Rs. 40 in his hands and managed to rattle the entire economic system. 


Harshad Mehta, who was a stock-broker, is said to have smartly manipulated the system. He somehow convinced the banks to have cheques drawn in his name. After this, the money drawn was funneled into the stock market. He embezzled vast amounts of money from the banking system of India. He then used it to invest in selected securities, which would eventually drive their demand and prices insanely high.  

Now, in any regular RF deal (Ready Forward), two banks are involved. Securities would be accepted in exchange for cash. But in this case, when a bank would ask for securities, he would involve a third bank, eventually a fourth, and so on. This ended up connecting various banks with a web of RF deals. In this way, he would get the cheque and also have the funds to himself for a short period.

A scam within scam:  when he noticed the dependence of the RF deals on BRs (bank receipts) and how the receipts were not backed by any securities, he further decided to exploit the system. By involving the bank of Karad (BOK) and the metropolitan co-operative bank (MCB), he was able to forge the bank receipts. Which now meant they were just a piece of paper with no real value.  


Sucheta Dalal’s (a journalist) curiosity to explore his luxurious lifestyle led to the big reveal. She was stupefied when she saw an impressive fleet of cars owned by him, including Lexus starlet, Toyota corolla, and Toyota sera, which were quite unaffordable for even a rich man at that time. This newfound interest had her investigate the bits of it. She tried to understand his sources of wealth gathered over the years. Sucheta Dalal finally exposed the scam on 23rd April 1992 through an article in the Times of India. He was arrested later on and eventually died in Thane prison due to cardiac arrest on 31st December 2001. She even published a book in 1993 titled, The Scam: Who Won, Who Lost, Who Got Away along with Debashis Basu based on the event.

When the scam came to light, over 600 civil suits and 76 criminal cases were filed against Harshad Mehta. 


The magnitude of this scam was so big that it had the potential to rattle and shatter the whole economy into pieces. If we look at the numbers, this man single-handedly deceived the entire nation with an amount over Rs 24,000 crores (bigger than Vijay Mallya scam). The immediate impact was a drastic fall in the share prices and the biggest plunge in the index; the market had ever seen. 

Less than two months after the scam was exposed, the market had already lost over a trillion rupees. More than that, it affected thousands of people and left many bankrupt. Several bankers were convicted, and it also led to the suicide of the chairman of Vijaya bank. 

Many still believe that Harshad did nothing more than exploit the loopholes in the system. But the wheel of justice took to look. It has been around 28 years since, but the drama never subdued; if only, it intensified. 

We have come a long way since every such event acts as a catalyst to reforms, policy changes, and better strategies. India’s financial position was quite unorganized at that time, with several new rules, laws, and ways we have changed for good. 

Written by – Trisha Sidhwani (Contestant No.-1)
Follow her on Instagram – @trisha.sidhwani

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Published by youngindianrevolution

An Organisation which stands for the Liberation of Human Mind from the dominant shackles put up by the society.


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