Swift action taken to stop NSEL crisis spillover: Chidambaram

Finance Minister P Chidambaram today said the government has taken "swift action" to ensure that the Rs 5,600 crore payment crisis at NSEL does not spill over to other regulated segments of the financial market.

He also said the Forward Contracts (Regulation) Act would be amended to strengthen the regulatory framework of the commodity derivatives market.

"Honourable members will recall the payment crisis in the National Spot Exchange Limited (NSEL). Following the transfer of the subject to the Ministry of Finance, swift action was taken to sequester NSEL and to ensure that there was no spillover of the crisis to the other regulated segments of the financial market," Chidambaram said while presenting the interim budget for 2014-15 in parliament.

The Finance Ministry took over regulation of commodity futures markets from the Consumers Affairs Ministry in September after the payment crisis surfaced at the NSEL.

The exchange, promoted by Jignesh Shah-led Financial Technologies (India) Ltd, was engulfed in a crisis after it suspended trade in July last year when two dozen counter-parties declared their inability to settle payments of Rs 5,600 crore to more than 13,000 investors.

As of now, NSEL has settled Rs 326.62 crore.

The FCRA Amendment Bill, which was introduced in the Lok Sabha in 2010, aims to strengthen the Forward Markets Commission, the commodity markets regulator, facilitate the entry of institutional investors and introduce new products such as options and indices for trading.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.

EDITORIAL OF THE DAY

  • Banks must learn from past mistakes to promote financial inclusion

    Prime minister Narendra Modi launched a massive financial inclusion programme yesterday titled “pradhan mantri jan dhan yojana’ (PMJDY), that will

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

Chander Mohan Sethi

CMD, Reckitt Benckiser India

COLUMNIST

Tushar Gandhi

Could prohibition mean profiteering?

In the mid 1930s, an American journalist asked Bapu if ...

Zehra Naqvi

The five universal languages of love

Love is a universal language. Don’t we all believe that? ...

Dharmendra Khandal

Time to protect our endangered wildlife species

After 65 million years of existence, the earth’s biodiversity is ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture