 "Reserve Bank feels NSEL case heat")
The Gujarat High Court on Tuesday issued notice to the Reserve Bank of India on a public interest litigation (PIL) seeking legal action against National Spot Exchange Ltd (NSEL) for operating a payment system without authorisation.
The NSEL Aggrieved and Recovery Association, a body of investors which has filed the petition, says lack of regulatory action led NSEL committing a fraud to the tune of Rs 5,600 crore through its trading terminal, in which around 13,000 investors lost money.
The division Bench of Chief Justice R Subhash Reddy and Justice V M Pancholi on Tuesday issued notice to RBI, seeking a reply by July 5.
The PIL wants RBI to initiate legal proceedings against NSEL. Investors suffered due to “failure on the part of the RBI to initiate timely legal proceedings against NSEL and its officers for operating a payment system without authorisation from the RBI”, it said.
NSEL provided electronic platform for spot trading in various commodities at a national level beginning October 2008, but stopped trading in August 2013, stating that it would meet all obligations towards brokers and clients. But it failed to keep the promise, it said.
