BS reported that in a first instance of its kind in the country’s commodity derivatives market so far, the National Commodity & Derivatives Exchange has paid a sum of INR 1 crore to settle its traders’ dues with warehouse keeper in Ghaziabad, west of Delhi, in Uttar Pradesh.

The report said “With this payment, the delivery of steel billet from the Ghaziabad based India International Steel Centre, the sole delivery centre for steel billets in North India, has resumed after a deadlock that lasted over a month.”

The report quoted Mr Ananda Kumar chief of corporate services of NCDEX as saying that “We initially paid the dues of INR 1 crore which will be recovered from clients later.”

As per report “Even though the exchange is not liable to pay C&F charges as these are to be paid by sellers and buyers concerned, the exchange stepped in to ensure smooth physical lifting of steel by members and clients.”

The report added that “According to the procedure prescribed by the exchange, each seller and buyer intending to make/take physical delivery of steel is required to appoint a C&F agent for compliances under the Excise and VAT legislation. The terms of appointment are to be settled by such a participant with the C&F agent. One of the C&F agents brought it to our notice that several intermediary sellers and buyers had not paid C&F charges in full.”

Earlier, 250 tonnes of steel billets, worth INR 8.5 million, had remained undelivered even after nearly a month of contract expiry. Ideally, the delivery should take place within three days, steel billet being a compulsory delivery contract.

Faced with India International Steel Centre denying delivery of steel billets for the contract expired in October due to unpaid duty for the past several months, the three clients trading through the Delhi based commodity broker Nokha Commodities had early last month threatened to take legal action against the exchange.

(Sourced from Business Standard)