NSEL cheques worth Rs. 550 crore bounce
FMC demands details from the NSEL, as cheques worth Rs.550 submitted by borrowers bounce
On 23 August, 2013, the cheques worth Rs. 550 crore submitted by the borrowers on the National Spot Exchange (NSEL) have bounced, following which the forwards market regulator, the Forward Markets Commission(FMC), has asked the bourse to disclose copies of warehouse audit reports along with receipts of physical stocks for the contracts traded on NSEL.
As tax authorities are conducting surveys on all borrowers, FMC is also investigating the issue to help probe the money trail. FMC is in the process of verifying the complete profiles along with the documents pertaining to know-your-customer(KYC) formalities of the borrowers whose cheques bounced. The regulator has asked NSEL , whether the e-series products which allows investors to hold bullion and metals in demat format was backed by adequate physical goods. The regulator is also verifying whether receipts received are tallied with the stocks available in various vaults. Further the exchange has been asked details of insurance if any of the commodity stocks. Many brokers and investors are of the view that stocks at various warehouses are either inadequate or non-existent. There is also doubt on the authenticity of borrowers.