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Money > Business Headlines > Report March 9, 2001 |
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'Brokers are facing a cash crisis'Yogesh Shah in Bombay The payment crisis that rocked Calcutta Stock Exchange has once again shifted people's attention towards the Bombay Stock Exchange and the National Stock Exchange. According to M L Soneji, vice-president of National Securities Clearing Corporation: "Though we don't see the possibility of any payment crisis on coming Tuesday (the day of settlement), the picture will be clearer on Tuesday only. It's difficult to categorically say that the crisis will end. One could only say with confidence that NSE has approximately Rs 25 billion of settlement guarantee fund and this will help the exchange." According to NSE officials, many terminals have been closed down since last few weeks. Says Soneji: "Previously, when we shut down the terminals, brokers used to arrange the cash in 10-15 minutes flat. But now, there is a cash crisis. It's taking longer to arrange for cash. Sometimes more than two hours. Brokers do have shares, but they are feeling the cash crunch." "The last two settlements' outstanding position was to the tune of Rs 70 billion. Now, we have an outstanding position of Rs 35 billion against which we have the margin money and additional base capital of Rs 29 billion. In view of this we don't foresee any crisis." NSE sources say that on March 7, interest rate of the money loaned by automatic landing and borrowing mechanism (ALBM) shot up by 100 per cent. It is now under control, and lenders in the market are bullish. |