NSEL woes to be debated in parliament on Tuesday

A calling motion has been moved for discussion on issue in Lok Sabha

The reverberations of crisis in the National Spot Exchange Ltd (NSEL) will  be heard in Parliament on Tuesday when a calling attention motion on the issue is expected to be taken up. However, there will  be no voting on the motion.

Food Minister K V Thomas told Business Standard a calling motion has been moved for discussion on the issue in the Lok sabha on Tuesday.

In a calling attention motion, any member can ask for specific reply from the minister concerned on any issue, overtaking all other business of the House.

The NSEL payment crisis came into fore after the exchange suspended trading in all future contracts, following objections from the government. Subsequently, there were reports that the exchange in violation of law had been allowing trading in forward contracts and it pre-sold commodities without having adequate quantities in the stock.

Later, a group of investors also alleged that the exchange did not have adequate stocks in its warehouses and was in process of defaulting in payments.

The Commodities market regulator, the FMC in its report on the crisis has favoured a multi-agency probe into the whole tangle, which will involve ministries of consumer affairs, finance and regulators Sebi among others.

Meanwhile, the Warehouse  Development and Regulatory Authority has expressed its willingness to probe into the stocks in NSEL warehouses and also urged the FMC to give it powers to regulate spot exchanges -- a demand which it has been making for long.

The finance ministry officials, on the other hand, said NSEL was not a regulated entity in the strict sense of term and hence there was no settlement guarantee fund.