Companies & Sectors
NSEL to disburse Rs11 crore to investors

NSEL received Rs11 crore as part of their settlement agreement under which Mohan India had agreed to pay dues of Rs771 crore over 12 months

National Spot Exchange Ltd (NSEL) said it has advised banks to disburse Rs11 crore to investors that was lying in its escrow account. NSEL said it received permission from commodities market regulator Forward Markets Commission (FMC) to distribute the money.


According to a release, NSEL received the money from Mohan India Group as down payment as part of their settlement agreement. "The disbursal will be done proportionately to all those who have receivable amounts against their unsettled obligations," NSEL said in the release.


Earlier in October, Mohan India Ltd has agreed to pay its dues of Rs771 crore to NSEL over the next 12 months. Mohan India at that time agreed to pay Rs11 crore as down payment to NSEL.


Talking about the pay out of Indian Bullion Markets Association (IBMA), promoted by Jignesh Shah-led Financial Technologies (India) Ltd, the Exchange said, as per the regulatory directive, it would retain Rs1.78 crore in its escrow account.


"We are in discussion with the authorities and are hopeful to resolve the issue and release the payouts of IBMA hitherto retained in escrow account of NSEL. Members are requested to take note of it," the release said.


NSEL has failed to settle Rs5,600 crore due to 148 members/brokers, representing 13,000 investor clients, after it suspended trade on 31st July on government direction.


 In August, NSEL filed complaint against five of its defaulting members before the investigation authorities. This includes Ark Imports Pvt Ltd, Lotus Refineries Pvt Ltd, NK Proteins Ltd, Vimladevi Agrotech Ltd and Yathuri Associates.


During the same month, NSEL had declared 10 members, including Mohan India as defaulters. The other nine members were LOIL Continental Food Ltd, LOIL Health Foods Ltd, Namdhari Food International Pvt Ltd, Namdhari Rice and General Mills, White Water Foods Private Ltd, Shree Radhey Trading Company, PD Agroprocessors Pvt Ltd, Swastik Overseas Corporation and Juggernaut Projects Ltd.


Unclaimed Deposits Lying with Banks

Banks have Rs3,652 crore of unclaimed deposits lying with them, as of end-December 2012; the State Bank of India (SBI) alone accounts for about 15% of the amount, the government informed parliament.

Banks are required to submit a return to the Reserve Bank of India (RBI) within 30 days of the close of the calendar year for all accounts that have not been operated for 10 years.
Total unclaimed deposits in public sector banks stood at Rs3,237 crore; for private sector and foreign banks, these aggregated Rs340 crore and Rs75 crore, respectively.

SBI, the country’s largest bank, had Rs539 crore of unclaimed deposits. The SBI group, which includes five associate banks, had unclaimed deposits of Rs714 crore. Canara Bank had unclaimed deposits of Rs526 crore, followed by Union Bank of India (Rs390 crore) and Punjab National Bank (Rs385 crore).

Among private sector players, ICICI Bank had unclaimed deposits of Rs101 crore while HDFC Bank had Rs13 crore.



MG Warrier

3 years ago

An excerpt from my article "Do we need a regulator for unclaimed deposits?" published in is copied below:

"In accumulating “unclaimed money” banks are in the elite company of LIC, Employees Provident Fund Organisation and Department of Posts, besides several other organisations in the public and private sectors, in holding on to money payable to the depositors/beneficiaries after the payments have become due on maturity of deposits, death of depositors and so on.

The government should guide all organisations sitting on unclaimed deposits or maturity proceeds of other financial instruments like insurance policies to exhaust all reasonable options available to track the depositors or their heirs whose money would be transferred to unclaimed accounts before such transfer every year. From notice boards at bank branches to electronic media could be used to draw the depositors’/beneficiaries’ attention. If banks’ secrecy provisions stand in the way, necessary changes should be thought of."

Fresh Anti-ponzi Scheme Bill Passed in WB Assembly

The new West Bengal Protection of Interest of Depositors in Financial Establishments Bill, 2013, was passed in the state legislative assembly, after withdrawing the earlier one, following objections from the Centre. The Bill was moved by the state finance minister Amit Mitra incorporating some clauses as suggested by the Union finance ministry.

Clarifications were sought on widening the powers of special designated courts dealing with cases related to chit funds and that no court could grant anticipatory bail. The new Bill incorporates fresh penal provisions like attachment of property in case of default in payment of deposit and transfer of property.

A similar Bill, introduced by the previous Left Front government in 2003, did not get the Presidential nod. The TMC government decided to repeal that Bill and introduce a new one. Ponzi or chain-money schemes have thrived in West Bengal for over a decade. One of them, Saradha, went belly-up in April 2013, after sucking thousands of crores of deposits.


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