90% of Kerala’s private security agencies operating illegally; exploitation and safety risks rise

KOCHI: A massive regulatory vacuum has gripped Kerala’s private security sector, with fewer than 10 percent of the estimated 1,500 agencies in the state operating with valid licenses or adhering to prescribed codes of conduct. This widespread lack of oversight means that the vast majority of the state’s nearly one million private security guards are currently employed by unauthorised entities.

To operate legally, a security agency must secure formal registration from the state Home Department and comply with the statutory norms laid out under the Shops and Commercial Establishments Act. Under the Private Security Agencies (Regulation) Act (PASARA), 2005, running an unlicensed agency is a criminal offense punishable by up to a year in prison and a ₹25,000 fine. However, local enforcement remains lax, and crackdowns on fly-by-night operators are exceedingly rare.

Labour exploitation ramping up

The lack of regulation has paved the way for severe labour exploitation across the state. Rogue agencies routinely siphon off 15 to 20 percent of guards' wages under the guise of "service charges." Driven by high profit margins and zero accountability, some operators are deploying vulnerable groups—including the elderly and the chronically ill—for a pittance, capitalising on their financial desperation.

Growing security headache for Police

This regulatory blind spot is also posing a direct threat to public safety. Legitimate security personnel frequently serve as vital "eyes and ears" for local law enforcement, often providing crucial intelligence on nighttime criminal activities and local drug trafficking.

However, unvetted agencies are increasingly acting as a loophole for criminal elements. Since these illegal operators completely bypass background checks and mandatory police verification, they occasionally recruit individuals with active criminal records. The dangers of this trend became evident recently in Ernakulam, where a group of unverified security workers linked to a fake agency allegedly launched an attack on police officers.

Massive revenue loss

Financially, the state exchequer is taking a significant hit. The Police Special Branch, which is tasked with vetting and monitoring these firms, charges a standard registration fee of ₹3,000 per operating partner. By completely bypassing the Special Branch registration framework and evading GST, these illicit agencies are draining lakhs of rupees from public revenue.

Industry representatives are now calling for immediate government intervention to clean up the sector and enforce accountability.

"If the government steps in to strictly regulate agency accreditation and ensure the implementation of minimum wages, the private security sector could actually become a viable, structured solution to combat local unemployment," said Habeeb Rahman, General Secretary of the Association of Private Security Industry (Kerala).