Mumbai: Commenting on the raging controversy over the National Stock Exchange scam and how former MD & CEO Chitra Ramakrishna shared confidential information with an outsider, Finance Minister Nirmala Sitharaman said on Tuesday that the government was looking into the lapses that had happened in connection with the co-location case.
“I am going through the details I have before me. The ministry will call for a press conference very soon. At this stage it is unfair to say anything,” she observed.
“Although you would perceive that charges involving NSE matter are well-established, I do not want to pre-empt the matter.”
Sitharaman said, “I have no comment to make on whether there was an adequate correctional step taken. I have no view this way or that until I get to the bottom of what is available before me. I am looking into it, but I won’t be able to comment on it.”
Her remarks come in the backdrop of an investigation into alleged irregularities by a stockbroker at the NSE and its ambit was expanded after a recent Securities and Exchange Board of India (SEBI) report cited ‘governance lapses’ at the exchange. Sitharaman was speaking at the Post-Budget Outreach Press Conference in Mumbai on Tuesday. During her two-day visit from February 21, she held meetings with the industry and financial market functionaries.
The Central Bureau of Investigation (CBI) has questioned former NSE group operating officer Anand Subramanian about his role at the exchange. Last week, the CBI quizzed Ramakrishna and another former CEO, Ravi Narain. The SEBI has levied a fine of Rs 3 crore on Ramkrishna, Rs 2 crore each on the NSE, Subramanian and Ravi Narain and Rs 6 lakh on V R Narasimhan, who was the chief regulatory officer and compliance officer.
LIC IPO
Notwithstanding the concerns over the potential fallout of the growing tensions between Russia and Ukraine, Sitharaman said the government was going ahead with the LIC IPO. “There is a buzz in the market and there is interest in the LIC IPO. We are going ahead with it,” Sitharaman said. However, she said, “We are equally worried if the market situation is conducive.”
Her comment came after the LIC filed a DRHP with SEBI on February 13, 2022, for the proposed IPO, billed as the country’s largest IPO. The issue will be open for the public in March.
While announcing the Union Budget 2022-23, FM Nirmala Sitharaman said that the LIC IPO would be crucial in meeting the disinvestment target set by the Central government in the fiscal ending in March 2022. The Union Budget had, last year, set up a disinvestment target of Rs 1.75 lakh crore.
“Our attempt is to arrive at a diplomatic solution so that tensions (Russia-Ukraine) come down and our trade and exporters do not suffer,” she said.
Application for new SEBI chief
With the SEBI in the eye of the storm with regard to Chitra Ramakrishna and the co-location case, Nirmala Sitharaman said that the process for appointing a new chief for SEBI was underway. “The process for calling applications for SEBI chief has happened,” she said. The term of the current SEBI chief, Ajay Tyagi, ends on February 28.
GST Council
Sitharaman said the finance minister of every state was present in the GST Council. “Transparency is built into the system, there is no room for preferential treatment for any of the states. What is applicable for one state is applicable for all,” she noted.
The FM said that the GST Council had decided that compensation cess collection would continue in the future as well, up to March 2026. This has been decided to meet the shortfall in compensation cess collected and to pay the interest on borrowed money.
Meanwhile, underscoring the importance of information sharing and collaboration, the Union finance minister exhorted all the banks to sign up for the account aggregator model which would facilitate seamless flow of credit for small borrowers and promote digital lending. She directed that the pilot for the account aggregator model and cash flow-based lending could be replicated in different regions around the country, including in the northeastern region, on the lines of the initiative by two banks in Varanasi district.
Sitharaman emphasised that digital banking, digital payments and fintech innovations were an opportunity for banks to find new ways to reduce the cost of intermediation and provide cost-effective services and that the benefits of digital banking should reach every nook and corner of the country in a consumer-friendly manner. It was further stressed that the banking industry should target opening accounts for unbanked adults under the Jan Dhan Yojana and ensure insurance/ pension coverage for all eligible adults.
Sitharaman said the Centre was moving forward on privatisation, adding that Air India had been cleared.
