Bonds, Currencies & Commodities
Exploring new avenues for revenues: Some suggestions

The Indian government may consider setting up National Savings and Investments Authority -NS&I like the UK to issue premium bonds and also use lottery system to generate more revenues for the exchequer

Both finance minister P Chidambaram and Reserve Bank of India (RBI) governor D Subbarao, in separate talks to the media tried to calm down the public through their statements. The Finance Minister assured that there is no intention to introduce capital controls, including on repatriation.


It may be remembered that only last week RBI had announced that resident Indians could not remit more than $75,000 a year, as compared to $200,000 earlier; likewise, the non-government companies’ overseas investment has been limited to 100% of their net worth, down from 400% earlier, through the automatic route.


Investor fear continues that the US Federal Reserve may soon end its economic stimulus programme next month. And the Indian finance minister assured investors that the ‘rupee’ at its current level is undervalued.


The RBI warned the government that they should explore new avenues to increase revenues to take care of its fiscal deficit target due to poorer tax collection and rupee depreciation.


To take care of these, the government plans to seriously raise Rs40,000 crore through disinvestment in government owned companies and by disposing residual share-holding in non-government companies, they may realise Rs14,000 crore.


At the same time, attempts are already being made to increase exports, reduce imports where possible and increase indigenous production of oil, gas and coal.  These are steps in the right direction.


But, what are the new measures for revenue that we can suggest, which have a proven track record elsewhere?


The first and foremost that comes to the writer's mind is for the government to consider, seriously, establishment of a National Savings and Investments Authority (NS&I), identical to what UK set up way back in 1970s. It refers to the premium bonds.


How do UK’s premium bonds operate? NS&I issues them in denomination of one British pound (£), with a minimum initial investment of £100 and up to a maximum of £30,000. However, each £1 will have a separate number (and certificate) and will be included in the monthly draw every month - 30 days after the purchase. All the premium bond prizes are free from British Income Tax and Capital Gains Tax.


These Bonds do not give any interest on your investment, and your interest, in fact, lies in being a lucky winner, from a low of £50 to a maximum of £1,000,000 month after month, all tax free, until you decide to redeem the bond!


In this lottery, the winning ticket is picked automatically by a machine, popularly known as ERNIE - Electronic Random Number Indicator Equipment. The present machine is the 4th generation advanced unit, which is also subject to an independent check on the randomness of ERNIE.


In effect, every holder, irrespective of whether he/she holds £100 worth of bonds or £30,000 have fair chance to win, except the holder of a larger number of bonds has a better chance!


What the Finance Ministry can do? It may authorize a joint venture between states of the Indian Union with the NS&I in the UK.  Because of the size and population of the country, the premium bonds may be introduced in a systematic way, state by state. The benefit of funds available under the scheme may be restricted to use for the development of the State running it.


Why not consider these premium bonds as an additional revenue generator? It must be recalled that India did have prize bond system in place some 50 years or so ago, but it did not work out well, presumably due to our inadequate system in place, at that time. With our advanced knowledge and computer superiority, this may work out fine this time!


The second proposal covers the introduction of lottery schemes, like the schemes in operation, successfully, in the US, run by various federal states.  Only a few weeks ago, for instance, a single lucky lottery winner was able to get the mega prize of some $450 million, almost Rs3,000 crore!


Here, unlike its British cousin, the lottery tickets are one time investment; either you win or lose!  The winner has the option of lump sum payment (tax about 30%) or spread over a number of years, with instalment being paid every year.  In this way, the income from the lottery is added to the annual earnings and the total is taxed.  In addition, there are multiple forms of lottery conducted, almost on a daily basis, and some lotteries are interconnected nationally, where several states participate.  Tickets are sold via thousands of shops, all connected through a national or state grid via the computer service!


The profits generated are substantial for the state, most of which is directed towards the promotion of education in the country.


This could be one another untapped avenue for generating huge amount of funds.


If professional help is taken from outside organizations mentioned above, there is no reason, why we cannot introduce these in India and benefit from them.


(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce and was associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)



jeyachandran s

4 years ago

i happened to read the article which has suggested the government to think of increasing its revenue. The idea of floating premium bonds is very good . But his second idea on lottery will lead millions of people to poverty. The lottery system which was very popular in states like tamilnadu a decade back had made poor and middle class people spending their entire earnings on gambling forgetting their families. The rich class can withstand the loss but not the poor. To become milliners overnight without hardwork will lead them only to misery . Years after banning the lottery it is not wise to think of going back to that evil.

Vinay Joshi

4 years ago

Dear Mr.A. K Ramdas,

Aug 26, the ‘Vote Security Bill’, sorry ‘FOOD SECURITY BILL’ passed by all the political parties in Lok Sabha, in the intervening period the ‘propagator’, of the said FSB was required to be hospitalised by 20:30 hrs. THE WORLDS LARGEST FSB WITH BIGGEST FISCAL.

[of course I wish her early recovery from her viral fever bout, supposedly will be discharged early Aug 27. The mute point, de facto PM in sanitized environment can be affected by viral aspects then what about others prone & suffering from pollution, having dirty water in BMC supply et al. OR was it her asthma, something else serious which is not out, though thro’ midnight stable. -- I’ve put up –its - no ref your write up.]

To answer your prologue of this article, YOU ARE RESORTING to 19th century measures then taken by Britain. Sir, we are in 21st century , FYI NS&I covers nothing in UK. 15% covering borrowing?! WHAT ARE THE RESULTS ? ANSWER NOW!
To replicate NSI from where monies to be raised & why? Answer.

Can the Govt. with its profligacy, inflationary interest rate borrow? To ease long term bond yields RBI is buying bonds, shifted M2M to H2M avoiding booking loses & got cash management bills else crashing of banks was imminent. Which resident Indian every year invests $200K overseas & that got to 75K who is affected? THIS STEP SHOULD HAVE BEEN INITIATED IN APRIL/MAY ‘13.
Even for corporate’s no freeze only on scrutiny basis. Apollo Tyres will now get clearance.

Disinvestment of 40KCR was stated in FY13 budget, not now! It seems impossible to be on target. Today SBI is seeking 4KCR capital infusion! From where it can come? Forget other PSU banks. Basel III norms are to be met in coming year.

Estimated private holdings of gold is to the tune of 7/10K mt, in view of revived GDS [gold deposit scheme] RBI can encourage banks even substituting CRR with such GDS. Hence investments out of economy can get into the domain. [Turkey implemented it.]

We require to generate revenues by increasing manufacturing, creating jobs, spending 1.25trn of FSB on infrastructure, avoiding wasteful expenditure & populist schemes [be of center/states], competitive exports with EPC’s heralding, port operational efficiency, skill improving programmes instead NREGA without any divisive politics.

To sum it, your NS&I & lottery is not viable.


RTI Judgement Series: CIC cannot abdicate its responsibilities to an expert body like RBI

An expert body or public authority like RBI cannot have a final say whether information should be provided to a citizen or not, ruled the CIC. This is 161st in a series of important judgements given by former Central Information Commissioner Shailesh Gandhi that can be used or quoted in an RTI application

The Central Information Commission (CIC), while allowing an appeal, directed the Central Public Information Officer (CPIO) of Reserve Bank of India (RBI) to provide complete information about inspection reports of co-operative banks. The CPIO had claimed exemption using Sections 8(1)(a) and (e) of the Right to Information (RTI) Act and also cited decision of the full Bench of the Commission in RR Patel vs RBI (CIC/MA/A/2006/00406 and 00150 dated 7 December 2006) case.


While giving this judgement on 1 November 2011, Shailesh Gandhi, the then Central Information Commissioner said, “The Commission cannot abdicate its responsibilities under the RTI Act to RBI on the ground that the latter is an expert body. If the position of the Full Bench is to be accepted, it would lead to a situation where RBI would have the final say in whether information should be provided to a citizen or not. Extending this logic, all Public authorities could be the best judge of what information could be disclosed, since they are likely to be experts in matters connected with their working. The Commission cannot rely solely on the decision of the public authority and must look into the merits of the case itself. It must determine, on its own, whether the denial of information by the PIO was justified as per Sections 8 and 9 of the RTI Act.”


Baroda (Gujarat) resident Jayantilal N Mistry, on 19 October 2010, sought from the PIO information about inspection reports of co-operative banks, especially, on Makarpura Industrial Estate Co-Operative Bank Ltd. Here is the information he sought under the RTI Act and the reply given by the PIO...


1. Procedure, rules and regulations of inspection being carried out on co - operative banks.

PIO's Reply- RBI is conducting inspections under section 35 of the B. R. Act, 1949 (AACS) at prescribed intervals.


2. Last RBI investigation and audit report carried out by Mr. Santosh Kumar during 23/04/2010 to 06/05/2010 sent to Registrar of the co - operative of Gujarat, Gandhinagar on Makarpura Industrial Estate Co - Operative Bank Ltd. Reg No. 2808.  

PIO's Reply- Information sought is maintained by the bank in a fiduciary capacity and was obtained by RBI during the course of inspection of the bank and hence cannot be given to outsiders. Moreover, disclosure of such information may harm the interest of the bank and banking systems. Such information is also exempt from disclosure under Sections 8(1)(a) and (e) of the RTI Act.


3. Last 20 years inspection report carried out with the name of inspector on the above named bank and action taken report.   

PIO's Reply- Same as at 2. above.


4. Reports on all co-operative banks that have gone into liquidation and action taken against all directors and managers for recovery of public funds, powers utilized by RBI and analysis, and procedures adopted. 

PIO's Reply- (i) Same as at 2. above.

(ii) This information is not available with the department.


5. Names of remaining co - operative banks under your observations against irregularities and action taken reports. 

PIO's Reply- No specific information has been sought.


6. Period required to take actions and implementations. 

PIO's Reply- No specific information has been sought.


Not satisfied with the PIO's reply, Mistry filed his first appeal. In his order, the First Appellate Authority (FAA) made following observations...


(i) The RTI Act was enacted to secure access to information under the control of public authorities, but subject to the provisions of Sections 8 and 9 of the RTI Act only. In the present matter, the CPIO has provided all the available information to the Appellant.


(ii) Section 8(1)(j) of the RTI Act is not attracted in the present matter. The FAA agreed with the CPIO's response in relation to queries 2, 3 and first part of 4. Reliance was placed upon the Bench decision of the Commission in RR Patel vs RBI (CIC/MA/A/2006/00406 and 00150 dated 7 December 2006).


(iii) The FAA relied on the decision of the Commission in Rajiv Daiya vs UCO Bank CIC/PB/A/2008/00589 and 67/SM and observed that as regards the second part of query 4, where the CPIO has stated that the information is not available with the department, the question of furnishing the information does not arise.


(iv) Information sought in query 6 was too sweeping and general in nature, and therefore did not require any further consideration.


“Vide letter dated 21 April 2011, the CPIO provided certain clarifications to the appellant,” the FAA said in his order.


Not satisfied with the FAA's order, Mistry, the appellant, approached the CIC with his second appeal.


During the hearing Mr Gandhi, the then CIC, noted that the CPIO had relied on the Commission's Full Bench decision in RR Patel vs RBI (CIC/MA/A/2006/00406 and 00150 dated 7 December 2006) to justify the denial of information regarding query no2,3 and first part of 4.


In relation to query 5, the CPIO stated that there was no compiled list of all co-operative banks where irregularities had been found. However, the CPIO submitted that he would now be able to provide information for the previous year.


The CPIO also claimed that disclosing information on queries 2, 3 and the first part of 4 is exempted under Section 8 (1) (a) of the RTI Act since disclosure of irregularities could lead to loss of faith in some banks and this could affect the economic interests of the State. He contended that the full bench decision of the Commission in RR Patel vs RBI (CIC/MA/A/2006/00406 and 00150 dated 7 December 2006) had accepted this contention of RBI.


As regards query 6, Mr Gandhi said the Bench agrees with the PIO's observation.


The Bench reserved its decision till next hearing.


During the next hearing on 1 November 2011, the Bench noted that Based on perusal of papers and submissions of the parties, it appears that information as per records has already been provided in relation to query 1. Mr Gandhi said, "As regards queries 5 and 6, if there is any information available on record, the same must be provided to the appellant."


In relation to queries 2, 3 and first part of 4, information has been denied on the basis of Sections 8(1)(a) and (e) of the RTI Act. Support was also placed on the Commission's full Bench decision in RR Patel vs RBI (CIC/MA/A/2006/00406 and 00150 dated 7 December 2006), the CIC observed.


The PIO contended that information sought in queries 2, 3 and first part of 4 was exempt under Section 8(1)(e) of the RTI Act.


Section 8(1)(e) of the RTI Act exempts from disclosure "information available to a person in his fiduciary relationship, unless the competent authority is satisfied that the larger public interest warrants the disclosure of such information".


Mr Gandhi said, the Bench on several occasions, has held that information provided in discharge of a statutory requirement, or to obtain a job, or to get a license, cannot be considered to have been given in a fiduciary relationship.


He said, "In the present matter, information provided by banks or institutions subordinate to the RBI is done in fulfilment of statutory compliance. The inspection, audit and investigation are done by RBI officers as part of a statutory duty and banks have to undergo this in compliance with statutory requirements. Therefore, the Respondent's contention that the information sought was exempt under Section 8(1)(e) of the RTI Act is rejected."


During the hearing, the PIO also claimed that the information sought in queries 2, 3 and first part of 4 was exempt under Section 8(1)(a) of the RTI Act. The PIO contended that if the information was disclosed, it could lead to a reduction of faith in banks, when people realized the shortfalls and could lead to a run on the banks. This could affect the economic interests of the State. The PIO was primarily depending on the decision of a full bench in RR Patel vs RBI (CIC/MA/A/2006/00406 and 00150 dated 7 December 2006).


Mr Gandhi said, "In RR Patel's Case, the Full Bench was considering the issue of disclosure of RBI's inspection report of a Cooperative Bank. One of the issues before the Bench was whether the inspection report was exempt from disclosure under Section 8(1)(a) of the RTI Act. The Full Bench relied on a decision of the Punjab & Haryana High Court in RBI vs Central Government Industrial Tribunal (dated 07/05/1958) which had observed that 'In an integrated economy like ours, the job of a regulating authority is quite complex and such an authority has to decide as to what would be the best course of action in the economic interest of the State. It is necessary that such an authority is allowed functional autonomy in decision making and as regards the process adopted for the purpose'."


Based on the above, the Full Bench, in paragraph 16, ruled inter alia that, "In view of this, and in light of the earlier discussion, we have no hesitation in holding that the RBI is entitled to claim exemption from disclosure u/s 8(1)(a) of the Act if it is satisfied that the disclosure of such report would adversely affect the economic interests of the State. The RBI is an expert body appointed to oversee this matter and we may therefore rely on its assessment. The issue is decided accordingly".


"It appears that the Full Bench was of the view that if RBI concluded that disclosure of inspection reports would adversely affect the economic interests of the State, the said information may be denied under Section 8(1)(a) of the RTI Act. There is no observation that the Full Bench had come to this conclusion by itself. Further, the observations of the Punjab & Haryana High Court in RBI vs Central Government Industrial Tribunal (dated 7 May 1958) relied on by the Full Bench were made much before the advent of the RTI Act and cannot therefore, be a guide for deciding on exemptions under the RTI Act," the Bench noted.


Furthermore, the RBI in RR Patel's case claimed that if inspection reports of banks were to be disclosed it would affect the economic interests of the state. The Full Bench decision appears to rely on the submissions of the Deputy Governor of RBI provided vide letter dated 21 November 2006 and were as follows:


"(i) Among the various responsibilities vested with RBI as the country's Central Bank, one of the major responsibilities relate to maintenance of financial stability. While disclosure of information generally would reinforce public trust in institutions, the disclosure of certain information can adversely affect the public interest and compromise financial sector stability.

(ii) The inspection carried out by RBI often brings out weaknesses in the financial institutions, systems and management of the inspected entities. Therefore, disclosure can erode public confidence not only in the inspected entity but in the banking sector as well. This could trigger a ripple effect on the deposits of not only one bank to which the information pertains but others as well due to contagion effect.

(iii) While the RBI had been conceding request for information on actions taken by it on complaints made by members of the public against the functioning of the banks and financial institutions and that they do not have any objection in giving information in respect of such action taken or in giving the substantive information pertaining to such complaints provided such information is innocuous in nature and not likely to adversely impact the system.

(iv) However, disclosure of inspection reports as ordered by the Commission in their decision dated September 6, 2006 would not be in the economic interest of the country and such disclosures would have adverse impact on the financial stability.

(v) It would not be possible to apply section 10(1) of the Act in respect of the Act in respect of the inspection report as portion of such reports when read out of context result in conveying even more misleading messages."


Mr Gandhi noted that the RBI argued that that it did not wish to share the information sought as some of it could "adversely affect the public interest and compromise financial sector stability". RBI was unwilling to share information, which might bring out the 'weaknesses in the financial institutions, systems and management of the inspected entities'. It was further contended that 'disclosure can erode public confidence not only in the inspected entity but in the banking sector as well. This could trigger a ripple effect on the deposits of not only one bank to which the information pertains but others as well due to contagion effect'.


He said, "It appears that the RBI argued that citizens were not mature enough to understand the implications of weaknesses, and RBI was the best judge to decide what citizens should know. Citizens must be given selective information about weaknesses exposed in inspection, to ensure that they have faith in the banking sector. They must see the financial and banking sector only to the extent, which RBI wishes. If the RBI made mistakes, or there was corruption, citizens would suffer. This appears to go against the basic tenets of democracy and transparency."


The CIC cited a clarion call in State of Uttar Pradesh vs Raj Narain (1975) 4 SCC 428, by Justice Mathew that stated...


"In a government of responsibility like ours, where all the agents of the public must be responsible for their conduct, there can be but few secrets. The people of this country have a right to know every public act, everything that is done in a public way by their public functionaries. They are entitled to know the particulars of every public transaction in all its bearing. Their right to know, which is derived from the concept of freedom of speech, though not absolute, is a factor which should make one wary when secrecy is claimed for transactions which can at any rate have no repercussion on public security".


Mr Gandhi said, "The idea that citizens are not mature enough to understand and will panic is repugnant to democracy. The exemptions under Section 8 and 9 of the RTI Act are the constraints put by Parliament and adjudicating bodies have to carefully consider whether the exemptions apply before denying any information under the RTI framework."


"It is pertinent to mention that in RR Patel's case, the Full Bench did not come to any specific conclusion that disclosure of inspection reports would prejudicially affect the economic interests of the State. Instead it left it to RBI to determine whether disclosure of the said information would attract Section 8(1)(a) of the RTI Act. This was primarily on the basis that RBI is an expert body and that any decision taken by it should be relied upon by the Commission. No legal reasoning whatsoever was given by the Bench for concluding the above. There is no evidence or indication that the Commission after taking cognizance of RBI's views had come to the same conclusion."


"If the position of the Full Bench is to be accepted, it would lead to a situation where RBI would have the final say in whether information should be provided to a citizen or not. Extending this logic, all public authorities could be the best judge of what information could be disclosed, since they are likely to be experts in matters connected with their working. In such an event the Information Commission would have no role to play. Parliament evidently expected that the Information Commission would independently decide whether the exemptions are applicable. The Full Bench did not give any independent finding that the disclosure of information would affect the economic interests of the State in its decision. This would completely negate the fundamental right to information guaranteed to the citizens under the RTI Act. In the case being considered by the full bench, it decided to accept the judgment of RBI. It is open to a Commission to defer to a judgment of another body, but this does not establish any principle of law, and would apply only to the specific matter," Mr Gandhi said.


The Bench said, "It is apparent from the scheme of the RTI Act that the Commission is a quasi- judicial body which is responsible for deciding appeals and complaints arising under the RTI Act. While deciding such cases, the Commission would necessarily have to consider whether there were any cogent reasons for denial of information under Sections 8 and 9 of the RTI Act. Since the Full Bench has not recorded any comment which shows that it consciously agreed that Section 8 (1)(a) of the RTI Act was applicable in such matters, it does not establish any legal principle or interpretation which can be considered as a precedent or ratio. Thus the decision is applicable only to the particular matter before it, and does not become a binding precedent."


Mr Gandhi said, the powers of the Commission are limited under the RTI Act and certainly do not confer upon it the power of review. "It is clear from the Full Bench ruling in RR Patel's case that it was reviewing the two decisions of Professor MM Ansari, then Information Commissioner on merits. The Full Bench certainly did not have the power to do so, given the provisions of the RTI Act and the law laid down by the Supreme Court in this regard. In fact, the Supreme Court in the Kapra Mazdoor Ekta Union Case clearly considered and clarified the ruling in the Grindlays' Bank Case (relied upon by the Full Bench). It appears that the Full Bench reviewed the issues based on merits in RR Patel's case in ignorance of the law laid down by the Supreme Court in Kapra Mazdoor Ekta Union Case. In other words, the RR Patel Case is per incuriam and is consequently, not binding on this Bench," he added.


"Having laid down the above, this Bench examines the contention of the PIO in the present matter that the information is protected by the exemption under Section 8(1)(a) of the RTI Act. Since I do not chose to defer to the RBI's judgment in this matter, I will evaluate whether the PIO's contention of exemption under Section 8 (1) (a) is tenable," Mr Gandhi said.


Section 8 (1) (a) exempts  "information, disclosure of which would prejudicially affect the sovereignty and integrity of India, the security, strategic, scientific or economic interests of the State, relation with foreign State or lead to incitement of an offence".


The PIO and the FAA claimed that revealing the investigation and audit report of Makarpura Industrial Estate Co-operative Bank Ltd in 2010 and the last twenty years would 'prejudicially affect the economic interests of the state'. "This Bench is unable to understand how disclosing the investigation and audit report of Makarpura Industrial Estate Co-operative Bank Ltd Reg No2808 would in any miniscule way affect the economic interests of the Indian Nation. Hence there is no ground for refusing information with regard to query 2 and 3. Further, reports on all cooperative banks, which have gone in liquidation sought in query 4, are also completely unlikely to affect the economic climate or interests of the country. Declaring the audit, inspection and investigation reports of all co-operative banks, which have gone into liquidation cannot do any further harm to such banks. If the banks have gone into liquidation, what more damage can come on them? The PIO perhaps rates the economic state of this nation as being extremely fragile to make such a claim. I therefore, cannot leave such a decision to the wisdom of RBI," Mr Gandhi said.


The CIC then referred to the conclusion and recommendation of the full Bench in paragraph 21, which stated....


"Before parting with this appeal, we would like to record our observations that in a rapidly unfolding economics scenario, there are public institutions, both in the banking and non-banking sector, whose activities have not served public interest. On the contrary, some such institutions may have attempted to defraud the public of their moneys kept with such institutions in trust. RBI being the Central Bank is one of the instrumentalities available to the public which as a regulator can inspect such institutions and initiate remedial measures where necessary. It is important that the general public particularly the shareholders and the depositors of such institutions are kept aware of RBI's appraisal of the functioning of such institutions and taken into confidence about the remedial actions initiated in specific cases. This will serve the public interest. The RBI would therefore be well advised to be proactive in disclosing information to the public in general and the information seekers under the Right to Information Act, in particular. The provisions of Section 10(1) of the RTI Act can therefore be judiciously used when necessary to adhere to this objective".


Mr Gandhi said, "The full Bench, clearly stated that a larger public interest was likely to be served by disclosure of the said information. It suggested that RBI should disclose most of this information in a proactive manner. The Full Bench of the Commission had effectively given a recommendation to RBI to disclose this information under Section 4 of the RTI Act.  I agree with the conclusion arrived at by the bench that the disclosure of the appraisal of financial institutions by RBI and remedial measures must be shared with public in a proactive manner."


Section 8 (2) of the RTI Act states, "Notwithstanding anything in the Official Secrets Act, 1923 nor any of the exemptions permissible in accordance with sub-section (1), a public authority may allow access to information, if public interests in disclosure outweighs the harm to the protected interests".


While allowing the appeal, Mr Gandhi said, "Merely because disclosure of such information may adversely affect public confidence in defaulting institutions, cannot be a reason for denial of information under the RTI Act. There must be transparency as regards such organisations so that citizens can make an informed choice about them. In view of the same, this Bench is of the considered opinion that even if the information sought was exempted under Section 8(1)(a) or (e) of the RTI Act, as claimed by the PIO, Section 8(2) of the RTI Act would mandate disclosure of the information."


He then directed the PIO to provide the information as per records to Mistry in relation to queries 2 to 6 before 30 November 2011.




Decision No. CIC/SM/A/2011/001487/SG/15434

Appeal No. CIC/SM/A/2011/001487/SG


Appellant                                        : Jayantilal N Mistry,

                                                                Baroda, Gujarat


Respondent                                   : CPIO & Chief General Manager,


                                                            Urban Banks Department,

                                                            Central Office,

                                                            1st Floor, Garment House, Worli,

                                                            Mumbai - 400018


Shankarlal Guru resigns as NSEL board chairman

Guru has alleged that few 'bad people' have entered the Exchange and they should be punished

Shankarlal Guru, has stepped down as non-executive chairman of National Spot Exchange (NSEL), saying that some 'bad people' have entered the crisis-ridden Exchange and were responsible for its woes. He, however, refused to name the persons or elaborate on 'bad people' entering NSEL.


Guru’s resignation comes on the heels of at least two directors on the five-member board of NSEL quitting as the exchange struggled to clear Rs5,600 crore payment dues.


Ramanathan Devarajan and BD Pawar, both non-executive directors, have quit, leaving just Jignesh Shah, who owns FTIL, the single largest promoter of NSEL, and Joseph Massey on the board.


“I resigned from the board of directors of NSEL on 7th August as I and (NSEL director) BD Pawar felt that our mission of promoting agriculture marketing is not being followed and there has been such a big scam in the exchange, which is not the right thing. I have nothing to do with this issue,” Guru was quoted in a PTI report.


“The Government has the machinery and it should take the money and return the hard earned money of the investors. There are some bad people in the exchange who should be punished,” he said.


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