Crack down on cash deals, FMC tells commodity bourses
30 Jul 2009
Commodities market regulator Forward Markets Commission today asked exchanges to impose stringent penalty on cash transactions, which continue despite having been banned.
News agency PTI reports that it is for the second time in as many months the regulator is asking the bourses to take stern action to curb rampant cash dealings. After a directive from FMC in June, commodity exchanges decided on a penalty of 0.1 per cent for every cash deal of over Rs10 lakh. However, this did not succeed much to prevent such a practice.
Thus the watchdog has been again constrained to write to exchanges asking them to impose stringent penalty on cash transactions. However, analysts say the FCI is a toothless tiger which needs to be reformed on the lines of the Securities and Exchange Board of India.
"We reiterate our position that cash transactions will not be allowed in the commodities futures market. We have directed exchanges to make necessary amendments in their by laws and put in place stringent rules to enforce the directions," FMC member Rajeev Aggarwal said.
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