NSEL Recovery Group (NRG)

National Spot Exchange Limited (NSEL) was established in 2005. NSEL

commenced its Live Trading journey on 15th October, 2008. Basically the idea
behind to start NSEL was to set spot trading platform for commodities. NSEL had
been operated in 16 States in India along with delivery-based spot trading in 52
commodities. NSEL is a company promoted by Financial Technologies India Ltd
and NAFED.

NSEL was thus established as an endeavor to fulfill the Government plans of

creating and developing a common market for agricultural produce by providing a
nationwide electronic trading platform with wide participation of a large number of
stakeholders in the agricultural commodity ecosystem. Mr. Anjani Sinha, was
responsible for daily operations, business growth and regulatory interaction at
NSEL.
Electronic spot exchange is a new concept altogether. First electronic spot market
to obtain license under APMC Act in Maharashtra, Karnataka, Gujarat, Orissa,
Rajasthan and MP. It was the trade activity that was carried out in all states by
enabling farmers to sell their produce to bulk consumers. Various trade matching
solutions provided by NSEL that benefited farmers, consumers, bulk buyers and
government agencies are:-

Continuous action by matching orders on price time priority

Forward auction model implemented for FCI
Forward auction model for sale of cotton bales on behalf of NAFED
Electronic auction for MMTC, PEC, NINL, STC and NAFED
Forward and Reverse auction model for HAFED

Impact of NSEL Intervention:

NSEL commenced its operation in Bihar and Orissa for creating direct
market linkage between farmers and upcountry buyers, exporters, processors
tec.
Financial Times, London devoted a full page article on an NSEL initiative in
Bihar, which was based on a field survey conducted by its team of reporters.
NSEL also got FOW, London ( Futures and Options World ) award for Best
Exchange in Product Innovation in South East Asia and Australia for this
intiative.
NSEL launched cardamom contract for the farmers of Kerala
Apart from trading operation, NSEL had carried out cotton procurement on
behalf of Nafed under the PSS operation conducted by the Government of
India
The crisis at NSEL arose when trading clients paired certain contracts to maximize
returns. A wide range of contracts were traded at NSEL included:

Farmers Contracts
Auction Contracts
Forward Auction
Reverse Auction
e-Series Contracts
Traders Contracts

When the Government instructed NSEL to stop all contracts immediately, market
intermediaries trading clients were caught in a liquidity problem, disrupting the
smooth settlement programme that had been going on since the inception of the
exchange. NSEL crisis with an estimate of Rs. 5600 crore came to light, where

NSEL eventually failed to pay its investors in commodity pair contracts after 31st
July, 2013. There were no underlying commodities in the warehouse, whereas the
buying and selling commodities like steel, sugar, paddy, ferrochrome etc. were
only shown on paper. Around 13,000 investors along with public sector units like
Metals and Minerals Trading Corporation of India (MMTC) and PEC were victims
of NSEL crisis. In order to fight against crisis, NSEL Recovery Group (NRG) was
formed.

NSEL Recovery Group (NRG) is an initiative by NSEL intended to assist

expeditious recovery of money from NSEL defaulters. There were 24 defaulters,
out of which 2 defaulters owing a total of Rs. 196 crore have almost cleared their
dues. NSEL is committed to expedite recovery from 22 defaulters, where the role
of NRG will include the following: To oversee the recovery efforts being made by NSEL.
To suggest additional measures for expediting recovery.
To ensure transparent dissemination of most authenticated information
related to NSEL recovery.
To help and assist the investigation agencies and judicial forum for
expeditious recovery of the money.
NSEL Recovery Group (NRG) is here to help and assist the investigation agencies
and judicial forums for recovery of money expeditiously, particularly the High
Court Committee, setup by the Honorable Bombay High Court, in fast forwarding
their logical conclusion. They are also the constituents of NRGs method to
stimulate recovery process.
The idea behind to form NSEL Recovery Group was to emphasize its collective
attention and resources, on recovery through peaceful and legal means. NSEL
Member Brokers and their Trading Clients can join the NSEL Recovery Group and

it does not constraint their right to be associated with any other forum/s or to
pursue legal course.

Prakash Chaturvedi - Chairman of NSEL Recovery Groups

Message :I welcome the members of the Advisory Board, the Volunteers and all stake holders
in the NSEL recovery proceeds. Thank you for joining the NSEL Recovery Group
(NRG). The management at NSEL, all of them - unexceptionably, empathize with
the pain of those who are yet to receive their money from the unscrupulous
Defaulting Members of the Exchange and the Clients of such Members. I write this
with all humbleness and humility realizing the responsibility NRG agenda enjoins
upon us. Lastly, please spread the word about NRG to all your fellow stakeholders
and encourage them also to join the NRG in any suitable capacity. The more we are
in numbers the better are our chances of achieving success soon. Remember we are
natural allies with each other in the recovery process. Our interests align.