The Public Accounts Committee (PAC) said it is not convinced by the Finance Ministry's reply on market participant identification number scheme (MAPIN).
MAPIN was abandoned midway.
In its recommendations on the action taken notes by the Finance Ministry on PAC's 2011 report on 'Unfruitful expenditure of investors money-SEBI', the Parliamentary panel said, "The Committee is not convinced with the reply of the Ministry and reiterates that the MAPIN scheme was conceived and implemented in haste for which it had to be abandoned mid-way defeating the very purpose".
The PAC adopted its recommendations on August 23 and it is likely to be tabled in Parliament next week.
The panel said the Ministry's contention that there was no loss to SEBI or the government "does not hold good" as the collection of Rs 11.54 crore from 3.84 lakh investors did not serve the "intended objective".
In its action taken notes, the Finance Ministry's Department of Economic Affairs said the exercise (MAPIN) was undertaken for the first time in the country and there was no benchmark available that could be followed.
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Maintaining that there was "no mala fide" in the decision, the Ministry sought to defend the role of National Securities Depository Ltd (NSDL), saying it did its job by providing registration as required.
NSDL had collected Rs 300 each from customers who had registered for MAPIN.
In July 2009, the Comptroller and Auditor General of India had slammed SEBI for awarding the database preparation work related to MAPIN to NSDL which resulted in "unfruitful expenditure" of Rs 11.54 crore of investors' money.