Bonds, Currencies & Commodities
NSEL Proposes Settlement Options

NSEL has proposed a partial payment option. It remains to be seen how the stakeholders view them

The National Spot Exchange Ltd (NSEL), which is facing a payment crisis, today announced plans to implement the settlement of dues in accordance with exchange rules and bylaws. Mr. Anjani Sinha, MD & CEO of the exchange stated that following meetings with the members of the exchange, the buyers/ processors and also the Forward Markets Commission (FMC), the following options have been proposed and the final decision would be taken after due consultation with all stakeholders.

Option 1:

A.      There are 8 members/ processors, who are willing to pay as per the scheduled due date or even earlier. The total amount pertaining to such 8 members is Rs. 2181 crores.

 

B.      There are 13 members/ processors, who have offered to pay 5 % of their total dues every week, if the same is agreed upon. Total amount comes to Rs. 3107 crores approximately. Name of such members are as follows:

 

Sr No

Name of Party

1

Jugger nautes Projects  Ltd

2

MSR Food Processing

3

PD Agro Processors  Pvt Ltd

4

Shree Radhe Trading Pvt. Ltd

5

Sankhya Investments

6

Spin cot Textiles Pvt Ltd

7

Swatik Overseas Corporation

8

Topworth Steels & Power Pvt Ltd

9

Vimladevi Agrotech Pvt Ltd

10

N K Corporation

11

NCS Sugar

12

METKORE ALLOYS & INDUSTRIES LTD

13

ARK Imports Pvt. Ltd.


C.      There are 3 processors with whom negotiation is still going on. The amount pertaining to these parties comes to Rs. 311 crore.

 

1

NAMDHARI FOOD INTERNATIONAL PVT LTD

2

NAMDHARI RICE & GENERAL MILLS

3

LOTUS REFINERIES PVT LTD

 

Option 2:

The exchange is in possession of Post dated cheques (PDC) from various processors amounting to Rs.  4900 crs. against their settlement obligation and balance parties have confirmed payment regularly. While PDCs are a commitment, the payout process may not roll out smoothly in a month’s time. Hence, the market participants have proposed Option 1 as a safer alternative.

 

FMC Officials have also asked for details of Members, Planters and other participants who are not cooperating with the Exchange in resolving the matter related to settlement cycle. The FMC along with other Government agencies would work together to ensure a safe and secure settlement of dues.

User

COMMENTS

Nilesh KAMERKAR

3 years ago

1)Commodity exchanges provide a platform for speculating on commodity prices.

2)Widespread speculation in commodities has fueled high inflation, which has been difficult to control.

Then would it be wrong to conclude?
That the common man is subjected to inflationary pressures because of these commodity exchanges, rather than benefit from the much talked about price discovery mechanism.

REPLY

Vinayak Bhimarao Mudholkar

In Reply to Nilesh KAMERKAR 3 years ago

Thank you for explanation!

Vinayak Bhimarao Mudholkar

In Reply to Nilesh KAMERKAR 3 years ago

Dear Sir,
As an ordinary investor I would like to ask whether the shaken confidence in commodity markets may lead to lower inflation ?(The commodity transaction tax may also be helpful to curb the speculation)

Nilesh KAMERKAR

In Reply to Vinayak Bhimarao Mudholkar 3 years ago

Sounds logical, but I do not know sir.

Sensex, Nifty may attempt to rally: Weekly closing report

Any market rally will be met by selling. The mood is bleak

With the second consecutive week of fall on the bourses, the Sensex and the Nifty hit their lowest level since 27 June 2013. On all trading days the benchmark indices closed in the negative. This is the eight consecutive fall for both Sensex and Nifty till Friday.

 

The Sensex lost 584 points (2.96%) to close the week at 19,164 and the Nifty settled at 5,678, down 208 points (3.54%).

 

On Monday, the benchmark continued the fourth day of decline, ahead of Reserve Bank of India (RBI) announcing its policy review on Tuesday, where analysts felt that there will not be any revision in key interest rates. On Tuesday, the RBI, as expected kept rates unchanged and reiterated that the recent measures to tighten liquidity would be rolled back in a calibrated manner as stability is restored in the forex market. Although this move was expected, stocks continued to fall. Even on Wednesday, the market remained negative, ahead of an announcement from the US Federal Reserve about the future of its stimulus programme.          

                                                           

On Thursday, the market again ended in the red, even as the Federal Reserve, after a two-day policy meeting, maintained its bond-buying program at current levels. The market was hit hard on that day by a 62% crash in Financial Technologies Ltd (FT) and Multi Commodity Exchange Of India Ltd (MCX) that tanked 20% hitting its lower circuit at Rs512.05. FT-promoted National Spot Exchange Ltd (NSEL) announced a suspension of trading and merging of settlement cycles of all one-day forward contracts, except e-series following an order from the Department of Consumer Affairs (DCA). There were fears that NSEL will end up defaulting on its obligations.

 

Even the easing of the FDI rules by the government for multi-brand retail did not help the indices to gain any strength and ended in the negative for the eighth consecutive trading session on Friday.

 

BSE Information Technology (up 4%) and BSE Consumer Durables (up 3%) were the top sectoral gainers in the week while BSE Realty Index (down 15%) and BSE Power (down 10%) were the top losers.

 

The top gainers on the 30-share Sensex were Wipro (15%), TCS (4%), Infosys (3%) and Bharti Airtel (2%), while Coal India (10%), I T C (10%), ONGC (9%), Hindalco Inds (8%) and NTPC (8%) were the major losers.

 

This week the RBI clarified that foreign institutional investors (FII) who have issued participatory notes (P-notes) can only hedge their currency risk if they receive a specific mandate from their clients. This move is likely to further curb speculation, making sure all P-note related derivative trades are done for genuine customer needs.

User

How to file RTI application effectively

The 175th seminar of Moneylife Foundation focussed on understanding the key provisions of the RTI Act. Shailesh Gandhi, the former Central Information Commissioner, explained important dos and don’ts and how one can file effective application to ensure all the queries are answered

Moneylife Foundation has conducted a series of events and workshops in the past to empower its members to use the RTI (Right to Information) Act effectively. This was another session for beginners of the RTI series conducted by Shailesh Gandhi, former Central Information Commissioner (CIC). The session for beginners has received huge participation in the past and Saturday’s session as well had over 70 members.

 

In this seminar for beginners, Mr Gandhi gave an overview of the RTI Act, how it originated and where it can be used. He took the members through the important sections of the RTI Act in detail. The former CIC also covered various sections of the RTI Act where information can be sought and can be refused. He also explained the RTI application format and the format for filing an appeal.

 

For RTI users, the important part to remember while filing an application is that the information sought should not be vague and a reasonable timeline should be given. The applicant also should remember that the information she is seeking should be available on record.

 

Mr Gandhi emphasised that all information that is available as a record in any tangible form can be provided. Therefore, before filing an application, individuals should review if the information they are seeking is available as a record.

 

The application should be addressed to the right department, he added. If not done, it would create unnecessary delays. The RTI should be sent preferably through Speed Post, as you would get an acknowledgement that the public information officer (PIO) has received it.

 

The RTI Act lists special instances where the authorities can seek exemption from disclosing the information. Usually, Section 8 of the Act is commonly used by public authorities for claiming exemption from disclosure of information. Mr Gandhi explained this section in detail and offered advice on how one can phrase their queries in such a way that the information cannot be denied claiming exemption under Section 8.

 

Many times, the PIOs use Section 8(1)(e) for denying the information.  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, "An equally important characteristic for the relationship to qualify as a fiduciary relationship is that the provider of information gives the information for using it for the benefit of the one who is providing the information. All relationships usually have an element of trust, but all of them cannot be classified as fiduciary. 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."

 

In addition, information provided by an individual in fulfilment of statutory requirements is neither covered by the exemption under Section 8 (1)(j) of the RTI Act nor can it be called an unwarranted invasion of his privacy, the former CIC said.

 

While seeking information related with third party, the PIOs often cite exemption. As per Section 11 of the RTI Act, the PIO, as per the case, should give a written notice to the third party and invite the third party to make a submission regarding whether the information should be disclosed or not. There are several instances, where the PIOs have denied information citing objection from the third party.

 

However, Mr Gandhi said, Section 11 does not give a third party an unrestrained veto to refuse disclosing information. It only gives the third party an opportunity to voice its objections to disclosing information. "Section 11 is only a procedure which requires the PIO to inform the third party of his intention to disclose the information if the information was received in confidence. After receiving any objection from the third party if the information is exempt as per the provisions of Section 8(1) or 9 the information may be denied by the PIO after giving reasons," he said.

 

The former CIC also explained to the audience the relevant section on complaints and second appeals and how one should go about it.

 

We have also compiled a list of important judgements in cases where the information sought has been wrongly refused. Read here.

User

COMMENTS

yeshvantwadekar

3 years ago

It was indeed most excellent session. Hard subject was explained very nicely by SIR GANDHI SHAILESH. power point presentation by him on monely life site if uploaded, will be very useful in future. His expirience as Information Commissioner gives waightage for his knowledge and sharing.
many people should attend such events.
Moneylife team deservs compliments.

Raghu

3 years ago

I attended your seminar on RTI conducted by Mr.S.Gandhi & the same was quite informative.
However I would like to know why there is no provision in the RTI Act to file the application anonymously as there are many instances of applicants being threatened & even killed in few cases.

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