Enforcement Directorate submits report on NSEL to FinMin

The govt's financial investigating agency alleges violation of FEMA, PMLA

A working group headed by the Enforcement Directorate today submitted its report to the Finance Ministry on the crisis-ridden National Spot Exchange Ltd (NSEL).

The report finds violation of Foreign Exchange Management Act (FEMA) and Prevention of Money Laundering Act (PMLA) by some borrowers on the exchange.

This group was to examine if there were violations of any laws or regulations by NSEL or associated companies.

The other group, headed by an RBI deputy governor, is yet to submit its report on measures that could be taken to ensure that there would be no systemic impact of the NSEL developments.

Officials in the department of consumer affairs said the developments in NSEL might spread to the Multi Commodity Exchange, as Financial Technologies is a majority holder in both.


The two working groups were earlier constituted within a larger task force to probe developments in the crisis-ridden National Spot Exchange Ltd (NSEL) and suggest ways to thwart any systemic risks.

“Once the two reports come, on decisions which fall under my jurisdictions, I will take those decisions," Finance Minister P Chidambaram had said earlier.

The two groups will come under the overall supervision of a task force under economic affairs secretary Arvind Mayaram.

The government had appointed two working groups since the developments in NSEL have wider ramifications, said Chidambaram.

NSEL, promoted by Jignesh Shah-led Financial Technologies (India) Ltd, is facing the problem of settling Rs 5,600 crore dues to 148 members, brokers, representing 13,000 investor clients, after it suspended trade on 31 July on the government direction.