Govt keeping a watch on NSEL developments, will take action: Chidambaram

The government has said it is keeping a close watch on the developments in crisis-ridden National Spot Exchange (NSEL) and will take action once reports of the two committees looking into the problems of the exchange are received.

"We have appointed two committees. Once two reports come, government will take action. We are keeping a close watch... We are in constant touch with SEBI and FMC," Finance Minister P Chidambaram said on Tuesday.

He said the committees would submit their reports by September 7.

NSEL, promoted by Jignesh Shah-headed Financial Technologies (FTIL), 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 July 31 on the government direction.

"NSEL is under FMC (Forward Markets Commission) and their administrative Ministry is Ministry of Consumer Affairs but it has wider ramifications. We have appointed two committees. They have been asked to submit their reports within 15 days by September 6 or 7," Chidambaram said.

The spot exchange announced a seven-month plan to settle the dues, but it was able to pay only Rs 92 crore on August 20, the first pay-out day as per the settlement calendar, as against a scheduled payment of Rs 174.72 crore.

FMC has also directed NSEL to liquidate the assets of those who have defaulted on their payments.

Meanwhile, Income Tax department has also conducted searches on the business premises of two dozen NSEL members.

The government is also examining a proposal to bring commodity markets regulator FMC under the purview of the Finance Ministry.

With inputs from PTI