The decision has been taken by National Stock Exchange, BSE and MCX-SX in consultation with market regulator Securities and Exchange Board of India (Sebi). The payment crisis involving an amount of over Rs 5,600 crore emerged at the spot commodity exchange late last month after it had to suspend trading following a government directive.
As the crisis continues to deepen, NSEL yesterday named 10 more defaulters, on top of nine entities who have been previously found to have defaulted on their dues.
While nine defaulters were barred from trading by stock exchanges late last week, the bourses today asked their trading members not to register 10 more defaulters as their clients till further notice.
Individually, NSE, BSE and MCX-SX also disabled Unique Client Codes (UCC) of those defaulter entities who are registered as clients of their respective exchange's members. All entities need UCC to trade on a stock exchange platform.
These 10 entities include --LOIL Continental Food, LOIL Health Foods, Mohan India, Namdhari Food International, Namdhari Rice & General Mills White Water Foods, Shree Radhey Trading Co, P D Agroprocessors, Swastik Overseas Corporation and Juggernaut Projects.
"In consultation with Sebi and other exchanges, as a proactive measure, to protect market integrity, to safeguard market participants' interest and as a risk management measure, it has been decided to disable UCC of above 10 entities from trading with immediate effect," a communique said.
NSEL was set up to provide an electronic platform to farmers and others for spot market trading in agriculture and other commodities, but it later emerged that some short- duration forward contracts were also being traded there. NSEL needs to pay dues totalling Rs 5,600 crore to 148 members/brokers, representing 13,000 investor clients.
The spot exchange later announced a seven-month plan to settle the dues, but it was able to pay only Rs 92.7 crore on August 20, the first pay-out day as per the settlement calendar, as against a scheduled payment of Rs 174.72 crore.