FMC allows NSEL to pay directly to IBMA members

Commodity market regulator FMC has allowed NSEL to pay directly to members of IBMA which was set up by the bourse and is also one of its investors.

The Indian Bullion Market Association, a subsidiary of the crisis-ridden NSEL, had reportedly invested about Rs 1,200 crore in the bourse.

In a letter to NSEL, FMC has directed that the pay outs to the members registered under IBMA can be made directly from the NSEL escrow account.

However, the regulator added that settlement of dues of members of IBMA directly from the NSEL escrow account should not in any way be construed so as to absolve NSEL or IBMA of any of their liabilities arising out of the agreements between them.

In August last year, the Forward Markets Commission had directed NSEL that all pay-in received from defaulter members shall be deposited in an escrow account and all the disbursement from the said account shall be as per the instructions or prior approval of the FMC.

NSEL suspended trading following a Consumer Affairs Ministry directive asking the bourse not to launch any new contracts till further order as it found violations of government norms in trading at the bourse.

So far, the exchange has defaulted in 20 pay outs.