Firstly our regulators(Exchanges & SEBI), do a great job to ensure that no such defaults happen. But in any such case if a broker defaults, there is an investor protection fund setup by NSE, where an investor can file for claim, subject to a maximum of Rs 15lks per investor per defaulter/expelled member. Check this link
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what is the level of protection an investors get from Exchange or Regulatory body for depositing cash in trading account , is it safe like banks ?
Gopal,
How do you know that a bank is safe? Do you remember GTB (Global trust bank), or some of the international banks that have collapsed.
The best an investor can do, be it with a bank or a brokerage firm is to choose a firm which doesn’t get into unfair practices, use extreme leverages, has excessive debt, and other such conditions which can cause downfall of any financial institution. It also makes sense to keep a tab on the profitability of the brokerage business you are trading with.
Hope this helps