Madurai

Spices Board plans online settlement mechanism for cardamom growers

Move aims at providing all information about transactions

THENI

The Spices Board has plans to introduce an online settlement mechanism that would help all stakeholders by ensuring timely payment to cardamom growers and providing all information about transactions either through online or through a mobile app, according to Spices Board Chairman, A Jayathilak.

In a press release here on Tuesday, he said that the board had enlisted the services of a bank in order to develop such an online settlement mechanism for cardamom auction.

A team from the bank had visited the e-auction centre at Spices Park, Puttady, and analysed the parameters for formulation of such a mechanism. Consequently, the bank presented an ‘escrow’ settlement model to the board.

The proposed model, which has been built in line with the existing auction system with minimal changes to fund flow procedures, will be operated via Spices Board settlement account through the identified bank instead of present settlement by individual auctioneer’s account.

This will enable the board to monitor the flow of transaction or payment made by buyers (dealers) as also their outstanding payments, payments made to sellers (growers) and their outstanding payments, and commission charges paid to the auctioneer.

All the three stakeholders – buyers, sellers and auctioneers – will be required to do one time registration in the online system for generating a unique stakeholder Id and password. The board will assist small and marginal growers for one-time registration. The stakeholders can track the status of their payment transaction online or through mobile app.

The proposed model has the potential to make e-auction of cardamom more efficient by introducing greater transparency, ensuring timely payments and putting in place a monitoring system, he added.

“The Board is seeking the views of sellers, dealers and auctioneers on the proposed settlement mechanism for the cardamom e-auction.”

Under the proposed system, Form "C" submitted by the auctioneer will be uploaded in the system. The buyer will make the payment against an invoice raised for a particular lot, and the payment will be pushed by the system directly to the seller's account after deducting and paying the commission charge to auctioneer’s account.

With the implementation of the settlement system, the delivery of the auction lot to the buyers will be made by the auctioneer only on production of delivery challan that would be generated on receipt of the payment against the particular lot.

As the delivery of the lot will be made only after payment by the buyer, there would not be any necessity to provide the bank guarantee by auctioneers, he stated.

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Printable version | Apr 7, 2020 3:43:02 AM | https://www.thehindu.com/news/cities/Madurai/spices-board-plans-online-settlement-mechanism-for-cardamom-growers/article24155760.ece

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