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Calcutta bourse says settlement merely delayed

The executive director of the Calcutta Stock Exchange, Tapas Datta, told a private television channel on Friday that it will not be known until Saturday whether any brokers have defaulted on their settlement payments.

News of the shortfall caused the Bombay Stock Exchange's benchmark index to plunge as much as 5.8 per cent on Friday as it prompted concern the payment crisis could point to a wave of major losses at brokerages around the country. That could lead to defaults and widespread credit risk across Indian equity markets.

"We are expecting more payments to come. So we will know only on Saturday whether there is actually a payments default," Datta told the CNBC financial network. "Right now what is happening is a postponement of the pay-in."

Friday was a bank holiday in Calcutta, accounting for the one-day delay in clearing up the outstanding settlement payments, Datta indicated.

He also said that the exchange had more than enough reserves to cover the current shortfall.

"We have Rs 5 billion in the settlement guarantee fund, but we are confident we will not be required to touch the settlement guarantee fund," Datta said.

"We are adequately covered otherwise from the brokers own resources," he added.

He named brokers Arihant Exim, Harish Biyani and some firms of broker Dinesh Kumar Singhania as among the people having difficulty in meeting their settlement payments.

The president of the Calcutta Stock Exchange also stressed the bourse had adequate funds to tide over a payment shortfall, and expressed confidence the matter will not blow into a big crisis.

"There is no crisis. The payment is delayed, but the payment is on," Kamal Parekh said in Calcutta.

Officials said the bourse had extended the pay-in which usually takes place on Thursdays.

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