Even as the crisis-ridden National Spot Exchange Ltd. (NSEL) faced a second default in payment deadline on Tuesday, the government held out an assurance to investors that it was keeping a close watch on the developments and action would be taken once reports of the two committees looking into the problems of the exchange are received.
Interacting with reporters , Finance Minister P. Chidambaram said: “NSEL is under FMC (Forward Markets Commission) and their administrative Ministry is Ministry of Consumer Affairs but it has wider ramifications. We have appointed two committees. They have been asked to submit their reports within 15 days by September 6 or 7. Once [the] two reports come, government will take action. We are keeping a close watch. ”.
Essentially, after suspension of trading on July 31 following a government directive, the NSEL- promoted by Financial Technologies Ltd. (FTIL), headed by Jignesh Shah, is faced with the problem of settling dues totalling about Rs.5,600 crore to 148 members/brokers who represent 13,000 investor clients.
Of the two committees set up to look into the violations of the law and regulations by NSEL as well as safeguard the interests of investors, one is a panel of secretaries headed by Department of Economic Affairs (DEA) Secretary Arvind Mayaram which will also suggest measures to check any systemic fall-out of the crisis on the financial system. The panel includes the Secretaries of Company Affairs, Consumer Affairs and the Department of Revenue.
Supporting the team would be two working groups headed by Director, Enforcement Directorate (ED) and RBI Deputy Governor.
