Search the Internet          Tips  Sites: Finance, Investment

Payment shortfall crisis at CSE resolved

The Calcutta Stock Exchange Thursday night claimed that its payment shortfall crisis was resolved and the pay-in No 150 was completed.

"There will be a full pay-out on Friday, as per schedule as the entire pay-in amount of Rs 2.30 billion, including the outstanding of Rs 620 milllion for pay-in No 149, was received," CSE executive director Tapas Datta told mediapersons after a marathon executive committee meeting.

He said the pay-in amount of Rs 2.30 billion was contributed to the extent of Rs 2.14 billion by member brokers themselves and the balance Rs 160 million was brought in from the exchange's security guarantee fund.

From the outstanding of Rs 620 million towards the pay-in No 149 due from three brokers that had failed to deposit the required fund earlier, the exchange had adjusted Rs 530 million from their pay-out proceedings, which was stopped earlier, Datta said.

The balance Rs 90 million and another Rs 70 million shortfall in the current pay-in from various brokers' accounts was adjusted from SGF, he said.

Committee member Girish Mehta said there was a delay of a few hours in pay-in because confirmations from bankers could not be received on time.

Unit Trust of India executive director B G Daga, who is a public nominee on the CSE board and had attended the day's meeting, had told mediapersons before entering the meeting room that the crisis would be resolved on Thursday.

A late night CSE press note said the total pay-in for settlement No 200150 ended on March 15 was Rs 1.69 billion, which excludes the pay-in liability of 10 defaulting members.

The figures reported by all five clearing bankers indicates that the pay-in amount has been received, except to the extent of around Rs 70 million. "This shortfall will be drawn from the SGF, which has no difficulty in meeting this obligation," it said.

The total liability on account of 10 defaulting members would be around Rs 90 million after adjustment on account of certain transactions which appear to be of disallowable nature, it said.

The press note said out of 10 such counter parties, four members, in the interest of the exchange has voluntarily agreed to provide amount equivalent to loss on their transactions.

In the case of the remaining six parties, their pay-out has been withheld and is adjusted against their liabilities. Thus the total obligation of the SGF is around Rs 160 million, it said.

Defending the move to use the SGF to avert any crisis, the exchange said, "As all over the world, and also at other exchanges in India, the SGF will meet the shortfall, if any, arising while settling the trades at the exchange."

The 10 defaulting members, who were already served with show-cause notice, will be declared defaulters on Friday and steps will be initiated to recover dues, the note said.

Tell us what you think of this report