By Sujit Bhar
The Calcutta Stock Exchange (CSE), one of India’s oldest and once its second busiest bourse after the Bombay Stock Exchange (BSE), is finally shutting down. What was once a symbol of Bengal’s financial prowess and India’s eastern commercial dominance has now sought a voluntary exit from stock trading after years of regulatory struggles, legal challenges, and an irreversible loss of relevance. The move not only marks the end of an era for the CSE, but also underlines a deeper structural transformation in India’s financial geography—the complete centralisation of India’s capital markets in Mumbai.
This development raises fundamental questions: Is it healthy for a nation of India’s size, diversity, and regional aspirations to have its entire financial activity concentrated in one city? Or is this concentration a natural, even necessary, evolution in a globalised economy that rewards efficiency and scale over regional dispersal?
With this backdrop, one needs to study the closure of the CSE and its broader implications for India’s financial ecosystem, regional economic balance, and future policy thinking.
Formally established in 1908, though informal trading had begun decades earlier under a neem tree near its current location, the CSE was once a powerhouse. Through the mid-20th century, CSE stood shoulder to shoulder with the BSE, driving the country’s capital markets. Kolkata—then Calcutta—was India’s business and financial nerve centre before independence, housing jute barons, tea magnates, and industrial giants who relied on the Exchange for capital.
At its peak, CSE had over 900 listed companies, thousands of members, and handled transactions worth billions. Even as late as the 1980s, it ranked second in India by volume and value of trade. But by the early 21st century, the Exchange was fighting for survival.
CSE’s trading was suspended in April 2013 by the Securities and Exchange Board of India (SEBI) for regulatory non-compliance. For over a decade, the Exchange waged legal battles to restart operations, arguing that it could modernise and meet SEBI’s norms. However, after multiple setbacks, in December 2024, the board finally decided to withdraw its court cases and seek a voluntary exit.
In April 2025, shareholders approved the decision in an extraordinary general meeting, paving the way for CSE’s formal exit from trading. SEBI has since appointed Rajvanshi & Associates to value the Exchange’s assets—the final step before granting the exit approval.
According to CSE Chairman Deepankar Bose: “Approval has also been obtained from the shareholders vide EGM dated April 25, 2025, relating to the exit of the stock exchange business. Accordingly, CSE submitted the exit application to SEBI, which has, in turn, appointed a valuation agency for undertaking the valuation of the stock exchange which is in progress.”
Once SEBI clears the process, CSE will continue as a holding company, with its subsidiary CSE Capital Markets Pvt Ltd (CCMPL) remaining active as a broker on the BSE and National Stock Exchange (NSE).
THE SCANDAL THAT STARTED THE FALL
The decline of the CSE can be traced to several factors—technological obsolescence, weak regulation, and a declining regional industrial base. But its biggest blow came from one of India’s most notorious financial scams: the Ketan Parekh scandal of the late 1990s and early 2000s.
Ketan Parekh, dubbed the “Big Bull of CSE”, exploited the Exchange’s lax surveillance mechanisms to manipulate the prices of select stocks—later called the “K-10” stocks—through circular trading and financing deals funded by banks. His operations, which cut across exchanges, revealed how the absence of unified regulation and poor oversight in regional bourses could destabilise markets.
When the scam unravelled in 2001, it exposed deep-rooted weaknesses in the CSE’s governance and internal controls. Investor confidence evaporated. Many brokers defaulted on settlements, leading to financial chaos and a loss of credibility that CSE never recovered from.
This episode coincided with SEBI’s growing assertion of authority and the consolidation of trading activity in the technologically advanced, more transparent platforms of Mumbai’s BSE and the newly established NSE.
CSE’s final years were marked by financial stagnation and attrition. Its FY25 report, while acknowledging its proud history of having 1,749 listed companies and 650 registered members, also reflected a subdued reality. Bose, the chairman, earned Rs 5.9 lakh in sitting fees that year, a small reminder of an institution that once influenced the fortunes of industries.
To prepare for its exit, CSE rolled out a Voluntary Retirement Scheme for all employees, costing Rs 20.95 crore, but saving Rs 10 crore annually in payroll. Every employee accepted the offer, with a handful retained on short-term contracts for compliance work.
CSE has also sold its three-acre property on Eastern Metropolitan Bypass—one of Kolkata’s prime commercial stretches—to the Srijan Group, a leading real estate developer in eastern India, for Rs 253 crore, pending SEBI’s nod.
The once-bustling trading floor that echoed with shouts of brokers has gone silent, soon to be replaced by another glass-and-concrete tower in Kolkata’s rapidly urbanising skyline.
THE DECLINE WAS INEVITABLE
While the Ketan Parekh scandal accelerated CSE’s demise, the roots of its decline go deeper. Three major factors shaped its downfall:
- Industrial decline of Bengal: The erosion of Bengal’s industrial and commercial base since the 1970s drastically reduced the number of regional companies seeking to raise capital. As factories shut down and business headquarters moved to Mumbai, Ahmedabad or Delhi, Kolkata’s financial ecosystem lost its purpose.
- Technological lag: Unlike NSE and BSE, which embraced digital trading, CSE was slow to adopt electronic systems. By the time it modernised, national exchanges had already captured most of the trading volume.
- Regulatory and structural weaknesses: SEBI’s tightening norms for net worth, technology infrastructure, and risk management made it difficult for smaller exchanges to survive. Many regional bourses like those in Delhi, Ahmedabad and Madras had already merged or exited. CSE’s exit is thus the final step in a long process of consolidation.
MUMBAI, THE UNCONTESTED FINANCIAL CAPITAL
With CSE’s exit, India’s financial system is now completely concentrated in Mumbai, home to both the BSE—Asia’s oldest stock exchange—and the NSE, which today handles over 90 percent of India’s equity trading volume.
Mumbai’s dominance is historical but also institutional. The Reserve Bank of India, SEBI, major banks, insurance companies, and financial regulators are all based there. The city hosts corporate headquarters, investment banks, mutual funds, and foreign institutional investors.
This concentration has helped India build deep, liquid, and globally integrated markets. The NSE and BSE have made trading efficient, transparent and accessible nationwide. A company in Guwahati or Coimbatore can list and raise capital without needing a local exchange. From a purely economic standpoint, centralisation has improved market integrity and reduced fragmentation.
THE DOWNSIDE
However, the regional imbalance it has created cannot be ignored. With every regional exchange closure—Madras, Delhi, Ahmedabad, now Calcutta—India’s financial geography has narrowed further due to:
1. Loss of regional capital mobilisation: Regional exchanges once served as local hubs for smaller enterprises. They allowed local investors to fund regional businesses. Without them, small and medium enterprises (SMEs) now struggle to access public capital markets, depending instead on costly loans or private equity.
2. Erosion of regional financial ecosystems:
Stock exchanges were not just trading platforms—they nurtured brokers, accountants, lawyers, analysts, and a financial services workforce. Their disappearance has hollowed out local expertise and employment.
3. Increased systemic risk: When all trading flows through a single city, the system becomes more vulnerable to shocks—natural disasters, cyber attacks, or infrastructure failures in Mumbai could disrupt the entire market.
4. Cultural and psychological impact: For Kolkata, once a city of commerce and intellect, CSE’s closure is another blow to its economic identity. From the jute mills to the tea trade to its stock exchange, the symbols of Bengal’s entrepreneurial era are fading, replaced by a service economy dependent on IT, education, and real estate.
THE WAY FORWARD
India’s financial future may belong to Mumbai, but its economic inclusivity depends on finding ways to integrate the rest of the country into the capital market ecosystem. The CSE’s story offers several lessons:
- Digital regionalization: Instead of reviving old-style exchanges, SEBI and the government could promote digital regional trading zones—platforms that allow SMEs from different states to list regionally, but trade nationally, using shared technology and compliance systems.
- Strengthen SME and start-up listings: NSE’s Emerge and BSE’s SME Exchange are steps in this direction, but awareness and participation remain low outside metropolitan centres. Stronger incentives, simplified compliance, and local outreach are needed to democratise access to capital.
- Preserve institutional memory: The archives, records, and legacy of institutions like the CSE should be preserved as part of India’s financial history. Their experiences offer valuable lessons in regulation, market culture, and regional finance.
REGIONAL HUBS A POSSIBILITY
India could consider setting up regional financial hubs—for example, in Bengaluru for fintech, Hyderabad for venture capital, or GIFT City in Gujarat for international finance—so that financial influence is not monopolised by Mumbai alone.
The CSE’s closure is both symbolic and structural. Symbolic, because it represents the end of Bengal’s long association with trade and capital markets. Structural, because it cements a national financial architecture overwhelmingly centred in one city.
Mumbai’s rise has undoubtedly made India’s markets more efficient and globally credible. Yet, the country’s economic resilience and regional inclusivity require a broader base of financial participation. A nation as large and diverse as India cannot afford to have its financial pulse confined to a single metropolis.
As Bose noted in his final report, the exchange “has played an important role in India’s capital markets.” Indeed, it did—for more than a century. But its end reminds us that markets, like cities, are living organisms: they thrive when their economies thrive, and they fade when the ecosystem that sustains them withers.
The neem tree under which trading once began more than a century ago is now gone. But the story of the CSE—and of India’s financial evolution from Calcutta to Mumbai—is not just about the fall of one institution. It is about the centralisation of capital and the decentralisation of opportunity, and whether India can still strike a balance between the two.
HISTORY OF CALCUTTA STOCK EXCHANGE
Way back in the 1830s, some Calcutta (now Kolkata) traders decided to get together under a neem tree to informally trade in stocks of some companies. From those days, the Calcutta stock broking fraternity travelled a long distance, slowly emerging as the second largest bourse of the country.
The origin of stock broking in India goes back to a time, when shares, debentures and bonds representing titles to property were first issued on the condition of transfer from one person to another. The earliest record of dealings in securities in India is the East India Company’s loan securities.
[Interestingly, the Amsterdam stock exchange, considered the oldest “modern” securities market in the world, was created shortly after the establishment of the Dutch East India Company in 1602 when equities began trading on a regular basis as a secondary market to trade its shares. The two bourses, therefore, share a common point of reference.]
By 1830, with a significant increase in the volume of business in Calcutta, Calcutta’s leading newspaper The Englishman reported in 1836, that quotations of four percent, five percent and six percent loans of the East India company as well as shares of the Bank of Bengal were being quoted at a considerable high premium over the par value of Rs 100. Three years later, in 1839, quotations were also found in newspapers published from Calcutta, of shares of the Union Bank, the Agra Bank and certain other commercial undertakings like Bengal Bonded Warehouse Docking Company and Steam Tug Company.
The advent of the Companies Act and subsequent introduction of the principle of limited liability, made investments in stocks and shares popular.
Though Stock Broking was practiced in Calcutta as early as 1836, the members of the broking profession had neither any code of conduct for their guidance, nor any permanent place for congregation. The centre of their activity was near a neem tree, where at present, stands the offices of the Chartered Bank (now known as Standard Chartered) on Netaji Subhas Road, Calcutta. In 1905, Chartered Bank began to construct their own building, which led brokers to shift the arena of their operation, to the neighbourhood of the recent Allahabad Bank, according to the CSE website.
The brokers had no shelter and business was carried on in the open place. The inconvenience of such trading, prompted brokers to organise themselves, and in May 1908, an association was formed under the name and style of the Calcutta Stock Exchange Association at 2, China Bazar Street.
On June 7, 1923, the Association was registered as a limited liability concern, with an authorized capital of Rs three lakh divided into 300 shares of Rs 1,000 each. The shares were subdivided into four shares of Rs 250 each in 1959. The Golden Jubilee of the Association was celebrated in 1938. The Diamond Jubilee in 1968 and the Platinum Jubilee in 1983.
The building at 7 Lyons Range, Calcutta, which was constructed in 1928, has been the office of the stock exchange for the last 70 years.
That great abode will now, possibly be up for grabs.