Warehouses storing commexes stock to be brought under WDRA

NEW DELHI: Amidst reports of transactions being made on NSEL against inadequate stocks, Consumer Affairs Minister K V Thomas today said all warehouses where commodity exchanges store their stocks will be brought under the warehousing regulator (WDRA).

Thomas said to check a National Spot Exchange Ltd (NSEL) like crisis in future, his ministry was planning to bring all the warehouses where the commexes store their stock under the Warehousing Development and Regulatory Authority (WDRA).

"I am sending a note to Finance Minister ( P Chidambaram) that these storages... and warehouses come under WDRA, then you know what capacity it has. All the warehouses should be registered under that," Thomas added.

WDRA under the Ministry of Consumer Affairs, Food and Public Distribution, was created to regulate and promote orderly growth of the warehousing business.

The Income tax department has reportedly pointed out that transactions on NSEL were made against non-existent to inadequate stocks. In some cases there were no stocks, in others the actual quantity of the stocks was below the level on which the trades took place.

In the aftermath of the crisis on NSEL, Thomas said he favoured shifting of the commodity market regulator FMC to Finance Ministry.

"My view from the very beginning is that the Consumer Affairs Ministry does not have much teeth and Finance Ministry has lot of organisations like I-T department, and this is quite different also," Thomas told PTI.

Replying to the question whether he is in favour of shifting Forward Markets Commission (FMC) to Finance Ministry, Thomas said: "I am definitely in favour of that, we have agreed with that and the process is under discussions."

On the issue of second consecutive default in weekly payments by NSEL, Thomas said, the primary interest of the government is that all investors get their money and those who have violated law be taken to court thereafter.

He added that now a committee has been constituted to look into the NSEL crisis and two working groups are seriously looking into the matter. A report will be shortly submitted.

NSEL is facing a crisis after it suspended trade on July 31, raising concerns about possible default of Rs 5,600 crore.