The unregulated nature of Badla made it a ticking time bomb. The market was highly oligopolistic, with just providing more than 75% of the funds. This lack of transparency and its role in creating systemic risk ultimately led to its downfall.
: Traders could hold a position beyond the standard settlement cycle without paying the full contract value or delivering shares. Badla Charges (Contango) index of badla
: If a buyer (bull) wanted to carry forward a purchase, they paid interest to a financier or the seller. Undha Badla (Backwardation) The unregulated nature of Badla made it a ticking time bomb