FM P Chidambaram calls for high level of probity in capital market

P ChidambaramP Chidambaram says rising volumes of rupee trade in NDF market abroad is a major concern. (PTI)

Pitching for high level of probity, Finance Minister P Chidambaram today said Indian capital markets are facing many concerns including low level of retail participation, which needed to be addressed urgently.

"It is important that all our institutions maintain the highest ethics and highest standards of probity. An ethics deficit can bring down the entire financial system as we have seen in the past.

"Some recent incidents have alerted us and we must never never take such chances again. We must demand the highest standards of probity from the owners and managers of financial markets infrastructure institutions," he said at the 20th anniversary of National Stock Exchange (NSE) here.

The statements comes in the backdrop of Rs 5,600 crore payment crisis at National Spot Exchange Ltd (NSEL).

Chidambaram further said rising volumes of rupee trade in NDF (Non-Deliverable Forward) market abroad is a major concern.

NDF is a forex derivative instrument, traded over the counter and operated in currencies that are freely convertible unlike the rupee. The rising volumes of rupee trade in the NDF abroad could adversely affect value of the domestic currency. Listing out other concerns like low retail participation, lack of financial literacy and financial inclusion, Chidambaram said such issues need to be addressed urgently.

Improvement of financial sector competitiveness and optimal use of exchange infrastructure for investment classes are other areas which need urgent attention, he added.

Referring to the recommendations of the Financial Sector Legislative Reforms Council (FSLRC), Chidambaram said as passing legislation on the suggestions will take time, it has been decided to implement the non-legislative ones first.

On the ordinance giving more powers to SEBI, Chidambaram said if the Standing Committee does not submit its report by end of the current session, the government will have to promulgate the ordinance for the third time.

... contd.

Please read our terms of use before posting comments
TERMS OF USE: The views, opinions and comments posted are your, and are not endorsed by this website. You shall be solely responsible for the comment posted here. The website reserves the right to delete, reject, or otherwise remove any views, opinions and comments posted or part thereof. You shall ensure that the comment is not inflammatory, abusive, derogatory, defamatory &/or obscene, or contain pornographic matter and/or does not constitute hate mail, or violate privacy of any person (s) or breach confidentiality or otherwise is illegal, immoral or contrary to public policy. Nor should it contain anything infringing copyright &/or intellectual property rights of any person(s).
comments powered by Disqus