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SEBI warns USE against monitoring lapses

SEBI while reviewing trading volumes across all currency trading platforms had noticed concentration of large trades and volumes, mostly by two trading members, at USE

Mumbai: Market regulator Securities and Exchange Board of India (SEBI) has warned the United Stock Exchange of India (USE) against monitoring lapses that led to concentration of currency trading in two entities, but did not impose any financial penalty on the bourse, reports PTI.

SEBI while reviewing trading volumes across all currency trading platforms had noticed concentration of large trades and volumes, mostly by two trading members, at USE.

“It was observed that one of these two trading members had accounted for about 77%-80% of the total turnover,” it said.

Finding USE “negligent to certain extent” in the discharge of its functions and duties, the SEBI order said: “... while dealing with matters concerned with discharge of regulatory functions, there would be a few occasions where monetary penalty would be appropriate ... given the nature of the lapses and the efforts made (in USE’s case) ... penalty of warning would be appropriate in this case.

Earlier, SEBI had issued a show cause notice in December last year to the USE. In the notice it was alleged “that there was absence of robust surveillance system at USE, to monitor the trend of domination of trade or artificial boosting of exchange volumes by one trading member”.

USE in its reply had admitted that it had detected the concentration of the trades and that the same was reported to the erstwhile managing director and CEO TS Narayanasami.

However, the USE had said that as there was no evidence of any manipulative trading patterns considering the fact that concentration of trades is a usual occurrence for any exchange in its initial stages, the same was not acted upon by Mr Narayanasami.

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Govt disburses Rs4.76 lakh crore farm credit in FY11-12

“The target of credit flow of the year 2011-12 had been fixed at Rs4.75 lakh crore and as per the provisional figures reported by NABARD, the achievement as on 31 March 2012 is Rs4,76,550 crore,” minister of state for agriculture Harish Rawat said in a written reply to the Rajya Sabha

New Delhi: The government disbursed Rs4.76 lakh crore as agricultural credit during the last fiscal against the target of Rs4.75 lakh crore, reports PTI.

“The target of credit flow of the year 2011-12 had been fixed at Rs4.75 lakh crore and as per the provisional figures reported by NABARD, the achievement as on 31 March 2012 is Rs4,76,550 crore,” minister of state for agriculture Harish Rawat said in a written reply to the Rajya Sabha.

The government has set a target of credit flow for the 2012-13 fiscal at Rs5.75 lakh crore, he added.

The flow of farm credit has increased from Rs2.29 lakh crore in 2006-07 to Rs4.68 lakh crore in 2010-11, the minister said.

The government in order to encourage farmers to avail institutional credit facilities provides crop loans of Rs3 lakh with an interest of 4% per annum, provided the farmer repays the loan as per the repayment schedule fixed by the banks, Mr Rawat added.

It has also started extension of benefit of interest subvention scheme to small and marginal farmers having Kisan Credit Card for a further period of six months for storing their produce in warehouses against negotiable warehouse receipts, he said.

The government also provides a collateral-free loan of up to Rs1 lakh to farmers, he added.

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RBI asks unregistered CICs not to accept public deposits

If unregistered CICs with asset size above Rs100 crore access public funds without obtaining a Certificate of Registration from the RBI, they will be seen as violating Core Investment Companies (Reserve Bank) Directions, 2011 dated 5 January 2011, the apex bank said

Mumbai: To protect depositors, the Reserve Bank of India (RBI) on Friday asked unregistered core investment companies (CICs) to stop accepting public deposits, reports PTI.

CICs are non-banking finance companies (NBFCs) which invest in shares for the purpose of owning a stake in a company, rather than for trading. They also do not carry out any other financial activities.

“The RBI having considered it necessary in the public interest and being satisfied that for the purpose of enabling the bank to regulate the credit system to the advantage of the country, it is necessary to amend the Core Investment Companies (Reserve Bank) Directions...”

“Every CIC exempted from registration requirement with RBI shall pass a board resolution that it will not, in the future, access public funds,” RBI said in a notification.

If unregistered CICs with asset size above Rs100 crore access public funds without obtaining a Certificate of Registration (CoR) from the RBI, they will be seen as violating Core Investment Companies (Reserve Bank) Directions, 2011 dated 5 January 2011, the apex bank said.

However, the RBI made it clear that CICs could issue guarantees or take on other contingent liabilities on behalf of their group entities.

“Before doing so, all CICs must ensure that they can meet the obligation thereunder, as and when they arise. In particular, CICs which are exempt from registration requirement must be in a position to do so without recourse to public funds in the event the liability devolves, else they shall approach RBI for registration before accessing public funds,” it said.

The RBI defined “public funds” as those funds raised either directly or indirectly through public deposits, commercial papers, debentures, inter-corporate deposits and bank finance but excludes funds raised by issue of instruments which are compulsorily convertible into equity shares within a period not exceeding 10 years from the date of issue.

In 2010, the RBI had directed Core Investment Companies (CICs) to register themselves with RBI in case their asset size is at least Rs100 crore..

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