FinMin issues show-cause notice to NSEL

The Finance Ministry has issued a show-cause notice to National Spot Exchange Ltd (NSEL), which is engulfed in a Rs 5,600 crore payment crisis, asking why exemptions granted to it in 2007 should not be withdrawn.

This is the second such notice to the spot commodity exchange promoted by Financial Technologies India Ltd. 

The Consumer Affairs Ministry, which regulated spot exchanges until the NSEL crisis broke last year, had exempted the exchange under section 27 of the Forward Contracts (Regulation) Act and allowed it to offer one-day forward contracts provided members do not resort to short sales.

"NSEL has received this letter from the Ministry of Finance. We are examining the letter and as per the deadline given, we will respond in 15 days’ time," an NSEL spokesperson explained on Wednesday.

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