He also said the Forward Contracts (Regulation) Act would be amended to strengthen the regulatory framework of the commodity derivatives market.
"Honourable members will recall the payment crisis in the National Spot Exchange Limited (NSEL). Following the transfer of the subject to the Ministry of Finance, swift action was taken to sequester NSEL and to ensure that there was no spillover of the crisis to the other regulated segments of the financial market," Chidambaram said while presenting the interim budget for 2014-15 in parliament.
The Finance Ministry took over regulation of commodity futures markets from the Consumers Affairs Ministry in September after the payment crisis surfaced at the NSEL.
The exchange, promoted by Jignesh Shah-led Financial Technologies (India) Ltd, was engulfed in a crisis after it suspended trade in July last year when two dozen counter-parties declared their inability to settle payments of Rs 5,600 crore to more than 13,000 investors.
As of now, NSEL has settled Rs 326.62 crore.
The FCRA Amendment Bill, which was introduced in the Lok Sabha in 2010, aims to strengthen the Forward Markets Commission, the commodity markets regulator, facilitate the entry of institutional investors and introduce new products such as options and indices for trading.
C P Krishnan, Whole Time Director Geojit Comtrade Ltd: Finance Minister has proposed to amend the Forward Contracts (Regulation) Act in the wake of the recent NSEL crisis, which is of high significance for the commodities market. However, being it an interim budget, impact of the same may probably be limited on the markets and the upcoming elections as well as the final budget will be largely looked upon.