Finance Minister P Chidambaram today said that 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 that 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 at National Spot Exchange Ltd (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 spill-over of the crisis to other regulated segments of the financial market,” Chidambaram said while presenting the Interim Budget for 2014-15 in Parliament.
The Finance Ministry had taken over the regulation of commodity futures markets from the Consumers Affairs Ministry in September after the payment crisis surfaced at 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 Rs 5,600 crore payment dues 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, facilitate the entry of institutional investors and introduce new products such as options and indices for trading.
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