The National Spot Exchange Ltd (NSEL)
plunged into a major crisis on Thursday as it suspended most trades on its platform giving rise to fears that there could be a default on payout to brokers and client to the tune of Rs 5,000-Rs 6,000 crore.
Ina bid to allay these fears, the NSEL on Thursday evening claimed that it has physical stock worth Rs 6,200 crore compared to total outstanding contracts of Rs 5,000-5,500 crore.
NSEL's decision on Thursday to
suspend trade in all contracts , except for 'e-series' products like gold and silver, came a fortnight after Government asked it not to launch new contracts.
"We have more than sufficient outstanding to cover the overall exposure. We have physical stocks worth Rs 6,200 crore compared to our total outstanding contracts of Rs 5,000-5,500 crore. There is nothing to worry for participant members or clients," NSEL Chief Executive Anjani Sinha said.
The statement came hours after the Government asked commodity regulator FMC to probe the crisis at NSEL and submit a report within a day. Sebi also began a separate probe amid a crash in shares of two listed group companies.
The exchange has Rs 850-900 crore in a guarantee fund, Sinha claimed.
Meanwhile, top domestic brokerages Edelweiss Financial Services, Religare Enterprises and Motilal Oswal said they have no exposure or open positions on the exchange.
"Religare Broking has no proprietary positions in NSEL and our total client exposure is less than Rs 5 crore," Religare said in a statement.
Edelweiss Financial Services and its subsidiaries, in a statement said, claimed "they do not have any position, whatsoever, on NSEL".
Motilal Oswal affirmed it is not facing any financial constraints for payouts to clients due to NSEL ban on one-day forward trading contracts. Its total operational level exposure is about Rs 245-250 crore on the clients.
Last month, the Consumer Affairs Ministry asked NSEL, promoted by Financial Technologies (FTIL), not to launch any new contracts till further instructions.
The action of NSEL (in suspending trade in contracts) does not entail any financial liability on the promoter company and the business of FTIL is as usual, FTIL Chairman and MD Jignesh Shah earlier said in a filing to the BSE.
NSEL's daily turnover, which was over Rs 1,000 crore till June, has come down to around 350 crore. The suspension in the contracts covers most of its products, industry sources said.
With PTI inputs
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