The mission of the WDRA is to ensure that the interests of the farmers are protected through the growth and development in the warehousing sector. The main objectives are to improve the fiduciary trust of depositors and banks, increase liquidity in rural areas, encourage scientific warehousing of goods, lower the cost of financing, promote shorter and efficient supply chains, enhance reward for grading and quality and ensure better price risk management.

The negotiable warehouse receipts issued by the WDRA will help the farmers to seek loans from banks against the NWRs to avoid distress sales of agricultural produce during the peak marketing season and to avoid the post-harvest storage loss.

The Authority has notified 123 agricultural commodities including cereals, pulses, oil seeds, spices, rubber, tobacco, coffee, etc for issuing negotiable warehouse receipts and also 26 horticultural commodities for cold storage.

1902 warehouses of 105.5 lakh MT capacity have been registered with WDRA since inception. Out of which 274 warehouses are of CWC, 194 of SWC, 1164 are Private Warehouses, 261 are PACS/FPO and 9 are Cold Storages. As of now, 745 warehouses having a storage capacity of 62 lakh MT have valid registration.

To discourage distress sale by farmers and to encourage them to store their produce against warehouse receipts the benefit of interest subvention was made available to small and marginal farmers having Kissan Credit Cards for a period of six months @ 7% on negotiable warehouse receipts.

The Authority has launched an electronic Negotiable Warehouse Receipt from 26th September 2018 and thereby migrating to IT-based eNWR ecosystem, by licensing two Repositories namely, M/s CCRL (sponsored by CDSL) and M/s NeRL (sponsored by NCDEX). All the registered warehouses are on boarded to Repository System for issuing eNWR against the deposits. The depositor can use eNWR to get loans against underlying commodities from banks and the lien will be marked by the repository.

Section 3 sub section (1) and (2) of the Warehousing (Development and Regulation) Act, 2007 provides that no person shall commence or carry on the business of warehousing issuing negotiable warehouse receipts unless he has obtained a registration certificate after fulfilling the prescribed norms in respect of the concerned warehouse or warehouses granted by the Authority under this Act.

The warehouse operators which fulfill the following criteria can apply for registration of their warehouse with WDRA:

  • The warehouse is constructed as per BIS/CWC/FCI standards and is storage-worthy.
  • Has all the safety and security arrangements for the stock and premises.
  • Has got requisite manpower with adequate experience in warehousing.
  • Availability of requisite infrastructure in terms of weighing, grading, and preservation.
  • The entity has its own Standard Operating Procedure (SOP) or adopts the model SOP of WDRA.
  • Adequate insurance is taken for the stock against fire, flood, theft, burglary, misappropriation, riots, strikes or terrorism.
  • Possesses Networth as specified by the Authority.
  • Furnishes security deposit as specified by the Authority for securing the negotiable warehouse receipts issued by the warehouse
  • Exhibits compliance to local laws for carrying out the business of warehousing.
  • Has a KYD process in place as prescribed by the Authority.

Details of the registration fee for different capacity of warehouses are as under:

Unit of registration Fee (non-refundable)
Each warehouse with a capacity of 10,000 Ton or less Rs. 20,000
Each warehouse with a capacity of more than 10,000 Ton but less than or equal to 25,000 Ton Rs. 25,000
Each warehouse with a capacity of more than 25,000 Ton Rs. 30,000

Where the applicant/ warehouseman is a Farmer Producer Organisation or a Co-operative, the fee shall be Rs. 5,000 per warehouse.

Networth requirement for different capacity of warehouses is as under:

Net worth Requirement
Storage capacity (in tons) Net worth (Rupees in crores)
Less than 1,000 0.1
1,001 – 3000 0.25
3,001 – 5,000 0.50
5,001 – 7000 1.00
7,001 – 10,000 2
10,001 – 15000 5
15,001 – 25,000 10
25,001 – 75,000 20
75,001 – 1,50,000 30
1,50,001 – 5,00,000 50
5,00,001 and above 100

Where the applicant/ warehouseman is a Farmer Producer Organisation or a Co-operative, the net worth should be positive.

Following financial concessions are provided to Cooperative Societies and FPOs to encourage them for registering their warehouses:

  • The registration fee is only Rs. 5000/- as compared to Rs 20000 to 30000 for others
  • Networth is required to be only positive irrespective of the capacity, while for others it is specified with respect to the capacity of Warehouse
  • Security deposit is Rs. 50000/- per warehouse in the form of a BG or bank FD (fixed irrespective of the value of NWRs issued by it), while for others it is a minimum Rs 1 Lakh plus a percentage of the value of NWRs issued.
  • Training of Warehouse Managers/ Supervisors by the WDRA

Following relaxations have been provided for registration of small capacity warehouses operated by PACS:

  • In case the warehouse is located on a raised well-drained site not liable for flooding/inundations and is away for a place likely to be affected by seepage water a plinth height of at least 30 cm may be accepted,
  • The minimum limit for capacity to be registered in the case of PACS warehouses will be 100 MT.
  • Availability of parking and maneuvering space for vehicles shall not be insisted upon.
  • The warehouse should have a stack plan drawn leaving reasonable space for alleyways
  • Other than the Secretary of the society one more staff of the PACS shall be engaged (on a full or part-time basis) for storage and preservation of the goods in the warehouse.
  • Availability of security guards may be desirable but not insisted upon for registration of the warehouse.
  • Availability of a pucca boundary wall / barbed wire fencing shall not be insisted upon. However, the warehouse should have the adequate arrangements for locking of godown and safety/security of stocks.
  • PACS warehouses up to 500 MT capacity shall have at least one fire extinguisher (of requisite type) and six fire buckets.

“Repository” means a company that has received a Certificate of Registration under the guidelines issued by WDRA.

“Authority” means the Warehousing Development and Regulatory Authority (WDRA) established under the WDR Act 2007.

“User” means a depositor, holder, Financial Institution, Exchange, Clearing House, Warehouseman, Repository Participant or any other person to whom the Repository provides core services.

NERL i.e. National E Repository Limited is an NCDEX group company that has received a Certificate of Registration under the guidelines issued by WDRA to act as a Repository.

  • enabling safe and accurate creation, storage, maintenance and cancellation of electronic Negotiable Warehouse Receipts;
  • enabling the transfer, pledge or removal of the pledge, e-auction of electronic Negotiable Warehouse Receipts;
  • enabling the delivery of goods in part or full, underlying the electronic Negotiable Warehouse Receipts, through the warehousemen;
  • on-boarding the users of a Repository;
  • performing the functions of a Repository Participant; and
  • providing appropriate access to the Repository to the users of the Repository;
  • Electronic Warehouse Receipts in a Repository will be the authentic proof of the existence of such electronic Warehouse Receipts, and the information contained in such electronic Warehouse Receipts and the record of electronic Warehouse Receipts held in a Repository shall override those of the warehouseman in case there is any difference in the record of the warehouseman and the Repository.
  • Electronic Warehouse Receipts can be used as collateral for loans from Financial Institutions
  • Electronic Negotiable Warehouse Receipts can be transferred within the Repository ecosystem from one account to another.
  • on-boarding the users of a Repository;
  • performing the functions of a Repository Participant; and
  • providing appropriate access to the Repository to the users of the Repository;

As mentioned in the Guidelines on Repositories and Creation and Management of Electronic Negotiable Warehouse Receipts issued by WDRA, a Repository may appoint any of the following as its RP.

  • bank, or financial institution licensed under the Banking Regulation Act, 1949 and the Reserve Bank of India Act, 1934;
  • any intermediary registered with the Securities and Exchange Board of India;
  • a warehouseman meeting the requirements that the Repository may specify, after such requirements for warehouseman have been approved by the Authority; and any other class of persons permitted to act as a Repository Participant by the Authority from time to time.

Following are the various categories of RPs that will be empanelled in NERL

Sr. No Category Net worth between Rs.
3 crore & Rs. 10 crore
Net worth < 3 crore
1 General RP Allowed with a cap of 50 times their Net Worth Not allowed
2 Limited purpose RP Allowed with a cap of 50 times their Net Worth Not allowed
3 Members of stock exchange Allowed with a cap of 50 times their Net Worth
  • Minimum Net-worth of Rs. 1 crore.
  • Allowed with a cap of Rs. 50 crore AUM
  • No minimum net worth for PACS, FPOs, NGOs, & APMC
  • RPs with a net worth more than Rs. 10 crore would not have any limit on AUM

Following documents are required to become an RP:

Sr. No Documents required
1 KYC details
2 Interest-Free Security deposit
3 Directors details viz. name, email id, contact details
4 Net worth certificate in prescribed format
5 Board Resolution
6 Photographs of Authorized Signatories
7 List of authorized signatories verified by bank
8 Self-certified PAN Copy
9 Self-certified PAN Copies of Directors
10 Self-certified copy Certificate of Incorporation
11 List of major clients
11 Letter from a bank certifying a/c no and date from which operational
13 T Returns & Annual reports for last 3 years
14 Proof of Residence - Promoters / Directors

Net worth certificate format and computation method should be as per Annexure C-1 and Annexure

C- 1A as mentioned below:

(To be provided on the Letterhead of the certifying Chartered Accountant)

Annexure C – 1A Computation of Net worth

Net worth certificate should be provided as per the format provided in Annexure C – 1) Computation of Networth as on… prescribed by Dr. L.C. Gupta Committee is as follows:

A Capital
B Free Reserves
C Less Non-allowable assets viz.,
(a) Fixed Assets
(b) Pledged Securities
(c) Member’s card
(d) Non-allowable securities (unlisted securities)
(e) Bad deliveries
(f) Doubtful Debts and Advances*
(g) Prepaid expenses, losses
(h) Intangible Assets
(i) 30% of Marketable securities
D Total Net Worth(A+B-C)

*Explanation:

Includes debts/advances overdue for more than three months or given to associates

For (Name of Accounting Firm)

Name of Partner/Proprietor Chartered Accountant
CA Stamp & Membership Number

  • Go to website https://nerlindia.com and click on ‘Sign Up’
  • Enter mandatory details
  • Upload your digital documents
  • Send the uploaded documents on the registered address of NERL
  • If all the documents are as per the requirements laid down by NERL, then NERL will approve the registration process.
  • System-generated ORG ID and password will be sent on the received on the registered credentials.

A Repository interface with the clients through its agents called Repository Participants (RPs). If a client wants to avail the services offered by the Repository, the investor has to open an account with an RP. A list of RP’s empaneled by NERL are available on our website. Link: https://nerlindia.com

Some of the important factors for the selection of an RP can be:

  • Convenience - Proximity to your office/residence, business hours.
  • Comfort - Reputation of the RP, past association with the organisation, whether the RP is in a position to give the specific service you may need?
  • Cost - The service charges levied by RP and the service standards.

You can approach any RP of your choice, fill up an account opening form and submit the required KYC documents. You can also refer to the Account opening manual available on our website www.nerlindia.com.

Yes, you can open more than one Repository accounts with the same DP.

Clients can open accounts with any Repository of their choice

Account opened by the client with an RP to avail services offered by a Repository can also be called as Beneficiary ID.

Ownership transfer can be done inside as well as outside RP’s.

  • The client will have to approach his RP and initiate the beneficiary to beneficiary transaction by filling in the relevant form.
  • RP will provide an acknowledgment copy of the said form and execute the said transaction in the NERL system.
  • Client to verify the requested transaction from the holding/transaction statement issued by the RP.

WSP’s will be registered by WDRA. Kindly refer to the WDRA website for further details.

Electronic credit is reflected in the users’ RP account on a real-time basis after completion of all the requisite formalities/norms laid down by the Repository/WDRA.

eWR means Electronic Non-Negotiable Warehouse Receipt eNWR means Electronic Negotiable Warehouse Receipt

The term warehouse receipt has been defined by WDRA in WDR Act 2007. eWR is non-negotiable in nature i.e. ownership of the commodity represented by warehouse receipt cannot be transferred. eNWR is negotiable in nature i.e. eNWRs can be traded, sold, swapped and used as collateral to support borrowing.

There is no limit for the quantity to be deposited in a single eWR & eNWR

  • Client to open an account with the RP / RPs empanelled by the Repository
  • Client to approach the Warehouse registered with WDRA for depositing the commodity approved by WDRA in the said warehouse
  • Client to complete the formalities prescribed by the Warehouseman (WSP) and pay the Storage, loading/unloading, Sampling, Assayer and any other incidental costs to the warehouse if any to the WSP.
  • The warehouse will enter the deposit details in the NERL system to generate eWR/eNWR.
  • Goods are then tested by the Assayer as per the procedure laid down by the WDRA and a grade is provided for the goods deposited.
  • If the goods are not as per the standards laid down by WDRA, the same will be rejected by WSP and the client will have to withdraw the goods from the warehouse.
  • The client will be issued eWR/eNWRs for the goods as per his choice, graded by the assayer as per the grading standards laid down by WDRA.
  • Client to verify the credit from the holding/transaction statement issued by the RP.
  • The client will have to approach his RP and initiate a withdrawal transaction as desired by filling in the relevant form.
  • RP will enter the request in NERL system and provide an acknowledgment of the withdrawal initiation form.
  • Client to approach Warehouse with the acknowledgment copy of withdrawal initiation form, identity proof and letter of authority (in case goods are to not withdrawn by the beneficiary holder.)
  • Client to remit storage charges and any other incidental charges to the WSP at the time of withdrawing goods from the warehouse.
  • WSP to confirm withdrawn quantity in NERL system.
  • Client to verify the same from the holding/transaction statement issued by the RP.

Only the warehouse approved & registered by WDRA are onboarded in Repository.

A list of Notified commodities is available on the WDRA website.

Can I deposit a commodity for which I don't want assaying to be done?

To convert eWR to eNWR and vice versa, you need to intimate the warehouse at the time of deposit. Once the deposit transaction is completed by the warehouse, conversion of eWR to eNWR and vice versa can be executed only by withdrawing the commodity from the warehouse and redepositing the same by following the complete deposit process laid down by the Repository/WDRA.

Any bank or Financial Institution that provides a loan against Electronic Warehouse Receipts can empanel with NERL as a Pledgee

  • The client will deposit the commodity as per the process explained above.
  • After the client has received electronic credit of eNWR / eWR Repository client will approach a Pledgee empanelled with NERL
  • The Pledgee will complete documentation and due diligence of the client
  • The client will then approach its RP and fill up a Pledge Request Form. The RP will guide the client to fill up the form.
  • RP will enter the details in the Repository system.
  • This transaction will be confirmed by the WSP and then the Pledgee.
  • The quantity will be lien marked in favour of the Pledgee.

The list of NERL empanelled Pledgee is available on NERL website www.nerlindia.com.

  • NERL will carry out auction through NCDEX e Markets Limited (NeML)
  • The commodity to be auctioned will be transferred from the client account to the Pool account of NeML
  • NeML will publish the commodity details on its website through a circular and will invite bids from its registered Members.
  • NeML will allocate a time slot for the auction to be carried out.
  • During this time slot NeML will display the details of the commodity on its auction platform and bidders will bid for the same.
  • At the end of the auction window, the highest bidder will be decided.
  • The financial will be settled with the highest bidder and then the commodity will be transferred into the bidder’s NERL account.
  • If the bidder does not have a NERL account, then withdrawal papers will be generated in the bidder’s favour.
  • The auction process will be based on the terms and conditions set by NeML.

No, an auction is one of the means through which the Financial Institution can liquidate the commodity of the loan defaulter.

“Repository” means a company that has received a Certificate of Registration under the guidelines issued by WDRA.

“Authority” means the Warehousing Development and Regulatory Authority (WDRA) established under the WDR Act 2007.

“User” means a depositor, holder, Financial Institution, Exchange, Clearing House, Warehouseman, Repository Participant or any other person to whom the Repository provides core services.

NERL i.e. National E Repository Limited is an NCDEX group company that has received a Certificate of Registration under the guidelines issued by WDRA to act as a Repository.

  • enabling safe and accurate creation, storage, maintenance and cancellation of electronic Negotiable Warehouse Receipts;
  • enabling the transfer, pledge or removal of the pledge, e-auction of electronic Negotiable Warehouse Receipts;
  • enabling the delivery of goods in part or full, underlying the electronic Negotiable Warehouse Receipts, through the warehousemen;
  • on-boarding the users of a Repository;
  • performing the functions of a Repository Participant; and
  • providing appropriate access to the Repository to the users of the Repository;
  • Electronic Warehouse Receipts in a Repository will be the authentic proof of the existence of such electronic Warehouse Receipts, and the information contained in such electronic Warehouse Receipts and the record of electronic Warehouse Receipts held in a Repository shall override those of the warehouseman in case there is any difference in the record of the warehouseman and the Repository.
  • Electronic Warehouse Receipts can be used as collateral for loans from Financial Institutions
  • Electronic Negotiable Warehouse Receipts can be transferred within the Repository ecosystem from one account to another.
  • on-boarding the users of a Repository;
  • performing the functions of a Repository Participant; and
  • providing appropriate access to the Repository to the users of the Repository;

As mentioned in the Guidelines on Repositories and Creation and Management of Electronic Negotiable Warehouse Receipts issued by WDRA, a Repository may appoint any of the following as its RP.

  • bank, or financial institution licensed under the Banking Regulation Act, 1949 and the Reserve Bank of India Act, 1934;
  • any intermediary registered with the Securities and Exchange Board of India;
  • a warehouseman meeting the requirements that the Repository may specify, after such requirements for warehouseman have been approved by the Authority; and any other class of persons permitted to act as a Repository Participant by the Authority from time to time.

Following are the various categories of RPs that will be empanelled in NERL

Sr. No Category Net worth between Rs.
3 crore & Rs. 10 crore
Net worth < 3 crore
1 General RP Allowed with a cap of 50 times their Net Worth Not allowed
2 Limited purpose RP Allowed with a cap of 50 times their Net Worth Not allowed
3 Members of stock exchange Allowed with a cap of 50 times their Net Worth
  • Minimum Net-worth of Rs. 1 crore.
  • Allowed with a cap of Rs. 50 crore AUM
  • No minimum net worth for PACS, FPOs, NGOs, & APMC
  • RPs with a net worth more than Rs. 10 crore would not have any limit on AUM

Following documents are required to become an RP:

Sr. No Documents required
1 KYC details
2 Interest-Free Security deposit
3 Directors details viz. name, email id, contact details
4 Net worth certificate in prescribed format
5 Board Resolution
6 Photographs of Authorized Signatories
7 List of authorized signatories verified by bank
8 Self-certified PAN Copy
9 Self-certified PAN Copies of Directors
10 Self-certified copy Certificate of Incorporation
11 List of major clients
11 Letter from a bank certifying a/c no and date from which operational
13 T Returns & Annual reports for last 3 years
14 Proof of Residence - Promoters / Directors

Net worth certificate format and computation method should be as per Annexure C-1 and Annexure

C- 1A as mentioned below:

(To be provided on the Letterhead of the certifying Chartered Accountant)

Annexure C – 1A Computation of Net worth

Net worth certificate should be provided as per the format provided in Annexure C – 1) Computation of Networth as on… prescribed by Dr. L.C. Gupta Committee is as follows:

A Capital
B Free Reserves
C Less Non-allowable assets viz.,
(a) Fixed Assets
(b) Pledged Securities
(c) Member’s card
(d) Non-allowable securities (unlisted securities)
(e) Bad deliveries
(f) Doubtful Debts and Advances*
(g) Prepaid expenses, losses
(h) Intangible Assets
(i) 30% of Marketable securities
D Total Net Worth(A+B-C)

*Explanation:

Includes debts/advances overdue for more than three months or given to associates

For (Name of Accounting Firm)

Name of Partner/Proprietor Chartered Accountant
CA Stamp & Membership Number

  • Go to website https://nerlindia.com and click on ‘Sign Up’
  • Enter mandatory details
  • Upload your digital documents
  • Send the uploaded documents on the registered address of NERL
  • If all the documents are as per the requirements laid down by NERL, then NERL will approve the registration process.
  • System-generated ORG ID and password will be sent on the received on the registered credentials.

A Repository interface with the clients through its agents called Repository Participants (RPs). If a client wants to avail the services offered by the Repository, the investor has to open an account with an RP. A list of RP’s empaneled by NERL are available on our website. Link: https://nerlindia.com

Some of the important factors for the selection of an RP can be:

  • Convenience - Proximity to your office/residence, business hours.
  • Comfort - Reputation of the RP, past association with the organisation, whether the RP is in a position to give the specific service you may need?
  • Cost - The service charges levied by RP and the service standards.

You can approach any RP of your choice, fill up an account opening form and submit the required KYC documents. You can also refer to the Account opening manual available on our website www.nerlindia.com.

Yes, you can open more than one Repository accounts with the same DP.

Clients can open accounts with any Repository of their choice

Account opened by the client with an RP to avail services offered by a Repository can also be called as Beneficiary ID.

Ownership transfer can be done inside as well as outside RP’s.

  • The client will have to approach his RP and initiate the beneficiary to beneficiary transaction by filling in the relevant form.
  • RP will provide an acknowledgment copy of the said form and execute the said transaction in the NERL system.
  • Client to verify the requested transaction from the holding/transaction statement issued by the RP.

WSP’s will be registered by WDRA. Kindly refer to the WDRA website for further details.

Electronic credit is reflected in the users’ RP account on a real-time basis after completion of all the requisite formalities/norms laid down by the Repository/WDRA.

eWR means Electronic Non-Negotiable Warehouse Receipt eNWR means Electronic Negotiable Warehouse Receipt

The term warehouse receipt has been defined by WDRA in WDR Act 2007. eWR is non-negotiable in nature i.e. ownership of the commodity represented by warehouse receipt cannot be transferred. eNWR is negotiable in nature i.e. eNWRs can be traded, sold, swapped and used as collateral to support borrowing.

There is no limit for the quantity to be deposited in a single eWR & eNWR

  • Client to open an account with the RP / RPs empanelled by the Repository
  • Client to approach the Warehouse registered with WDRA for depositing the commodity approved by WDRA in the said warehouse
  • Client to complete the formalities prescribed by the Warehouseman (WSP) and pay the Storage, loading/unloading, Sampling, Assayer and any other incidental costs to the warehouse if any to the WSP.
  • The warehouse will enter the deposit details in the NERL system to generate eWR/eNWR.
  • Goods are then tested by the Assayer as per the procedure laid down by the WDRA and a grade is provided for the goods deposited.
  • If the goods are not as per the standards laid down by WDRA, the same will be rejected by WSP and the client will have to withdraw the goods from the warehouse.
  • The client will be issued eWR/eNWRs for the goods as per his choice, graded by the assayer as per the grading standards laid down by WDRA.
  • Client to verify the credit from the holding/transaction statement issued by the RP.
  • The client will have to approach his RP and initiate a withdrawal transaction as desired by filling in the relevant form.
  • RP will enter the request in NERL system and provide an acknowledgment of the withdrawal initiation form.
  • Client to approach Warehouse with the acknowledgment copy of withdrawal initiation form, identity proof and letter of authority (in case goods are to not withdrawn by the beneficiary holder.)
  • Client to remit storage charges and any other incidental charges to the WSP at the time of withdrawing goods from the warehouse.
  • WSP to confirm withdrawn quantity in NERL system.
  • Client to verify the same from the holding/transaction statement issued by the RP.

Only the warehouse approved & registered by WDRA are onboarded in Repository.

A list of Notified commodities is available on the WDRA website.

Can I deposit a commodity for which I don't want assaying to be done?

To convert eWR to eNWR and vice versa, you need to intimate the warehouse at the time of deposit. Once the deposit transaction is completed by the warehouse, conversion of eWR to eNWR and vice versa can be executed only by withdrawing the commodity from the warehouse and redepositing the same by following the complete deposit process laid down by the Repository/WDRA.

Any bank or Financial Institution that provides a loan against Electronic Warehouse Receipts can empanel with NERL as a Pledgee

  • The client will deposit the commodity as per the process explained above.
  • After the client has received electronic credit of eNWR / eWR Repository client will approach a Pledgee empanelled with NERL
  • The Pledgee will complete documentation and due diligence of the client
  • The client will then approach its RP and fill up a Pledge Request Form. The RP will guide the client to fill up the form.
  • RP will enter the details in the Repository system.
  • This transaction will be confirmed by the WSP and then the Pledgee.
  • The quantity will be lien marked in favour of the Pledgee.

The list of NERL empanelled Pledgee is available on NERL website www.nerlindia.com.

  • NERL will carry out auction through NCDEX e Markets Limited (NeML)
  • The commodity to be auctioned will be transferred from the client account to the Pool account of NeML
  • NeML will publish the commodity details on its website through a circular and will invite bids from its registered Members.
  • NeML will allocate a time slot for the auction to be carried out.
  • During this time slot NeML will display the details of the commodity on its auction platform and bidders will bid for the same.
  • At the end of the auction window, the highest bidder will be decided.
  • The financial will be settled with the highest bidder and then the commodity will be transferred into the bidder’s NERL account.
  • If the bidder does not have a NERL account, then withdrawal papers will be generated in the bidder’s favour.
  • The auction process will be based on the terms and conditions set by NeML.

No, an auction is one of the means through which the Financial Institution can liquidate the commodity of the loan defaulter.

Any person commencing or carrying on the warehousing business and intending to issue Negotiable Warehouse Receipts (NWRs) has to get the warehouse registered with the Warehousing Development & Regulatory Authority (WDRA). The Warehousing (Development & Regulation) Act, 2007 and the Warehousing (Development & Regulation) Registration of Warehouse Rules, 2017 are available under the Section “Act and Rules” of the WDRA Portal. Amendments to the Rules and Regulations and the relevant circulars on insurance and guidelines on empanelment of inspection agencies and inspection of warehouses are also available on the Authority’s website. Since a system of online registration of warehouses has been put in place from November 1, 2017, all applications for warehouse registration have to be submitted online. Detailed instructions for online registration of warehouses are available on the WDRA portal.

Procedure

  • The applicant warehouse may make an application to the Authority for registration of its warehouse after registering on the website of the Authority and then signing in to submit an online application.
  • In case of non-individual warehouse operators, the application shall be submitted in two parts, first, the warehouseman registration application will be submitted. Once warehouseman is approved, then only application for registration of warehouse (s) shall be submitted online.
  • Registration fee requirements are as follows:
  • Application fee (non-refundable) for registration of warehouse or renewal thereof is as follows and payable by way of online payment while submitting the warehouse registration application:

    Unit of registration Fee (non-refundable)
    Each warehouse with a capacity of 10,000 Ton or less Rs. 20,000
    Each warehouse with a capacity of more than 10,000 Ton but less than or equal to 25,000 Ton Rs. 25,000
    Each warehouse with a capacity of more than 25,000 Ton Rs. 30,000
  • Where the applicant/ warehouseman is a Farmer Producer Organisation or a Cooperative, the non-refundable registration fee shall be Rs. 5,000 per the warehouse.
  • The online application uploading the required documents as listed at para 2 below and the registration fee may be submitted online.
  • The Authority has so far notified 123 agricultural commodities and 26 horticultural commodities for issuance of NWRs. The list is available on the website of the Authority and also linked in the online application as a drop-down. An applicant should specify the names of commodities to be stored in the warehouse for which registration is sought from the drop-down menu while filling online application.
  • In case the application is found in order, the Authority may cause a physical inspection of the warehouse concerned to verify the infrastructure of the warehouse and other particulars as specified by the Authority. The inspection guidelines detailing the infrastructure requirements of a warehouse and also the physical inspection checklist are available on the Authority website. For sake of transparency and efficiency, the inspection of warehouses has also been made online.
  • In case the physical inspection establishes the compliance with the infrastructure and other requirements specified by the Authority, the applicant shall be required to furnish the Security Deposit as per norms specified by the Authority
  • If the Security Deposit is furnished within the time schedule, a certificate of Registration is issued which contains the Warehouseman ID and Warehouse ID of the Warehouse concerned.
  • Documents to be uploaded with the application - Every application for registration of a warehouse shall be required to upload the following documents in the online application. Hence, the applicant may keep a scanned copy of these documents handy (in the system or in a pen drive) while filling online application.
  • S.No. Document to be submitted
    i Photograph of Authorized/Associate Authorized Representative
    ii Applicant's proof of identity as required at Fifth Schedule of the Warehousing (Development and Regulation) Registration of Warehouses Rules, 2017
    iii dentity and address proof of Authorized/Associate Authorized Representative (in case of non-individual entities)
    iv Standard Operating Procedures
    v Document in support of net-worth as required under Rule 18 (5) of the Warehousing (Development and Regulation) Registration of Warehouses Rules, 2017 and as amended on 20.03.2018.
    vi Copy of Insurance policies as prescribed under Rule 17 of the Warehousing (Development and Regulation) Registration of Warehouses Rules, 2017. Details are available on the WDRA portal under Documents-Circular section vide Circular dated 27.4.2017
    vii Layout Plan of the warehouse(s)
    viii Basic Data Sheet in case of cold storage
    ix Proof about technical standards under which cold storage has been constructed
    x List of equipment for the preservation of goods available at the warehouse
    xi List of equipment for assaying goods available at the warehouse
    xii List of equipment for weighing goods available at the warehouse (details of an internal or external lorry weighbridge is also required to be provided)
    xiii Fire Safety arrangements at the warehouse
    xiv If the warehouse is owned: Copy of the Records of Rights or registered title deed in respect the land on which warehouse concerned is located as per the Sixth Schedule of the Warehousing (Development and Regulation) Registration of Warehouses Rules, 2017
    xv Document to demonstrate effective control over the Warehouse, any of the following ( as per the First Schedule of the Warehousing (Development and Regulation) Registration of Warehouses Rules, 2017):
    (i) lease deed or rent agreement, (ii) sub-lease agreement and lease deed indicating that subleasing is permitted, (iii) revenue sharing agreement, (iv) NOC from Municipal Corporation/ Panchayat/ local body ( as the case may be), (v) lease agreement from concerned APMC, (vi) copy of allotment letter from State Government
    For each warehouse listed in the application separately.
  • Immediately upon receipt of its registration certificate, the warehouseman shall display the same and keep it in a conspicuous place in the principal place of its business until suspended or revoked. However, the valid registration certificate is also available in the login of the warehouseman online.
  • The certificate of registration shall not be transferable.
  • The Authority or its authorised representative may inspect or examine the warehouse registered under the Act at any time without giving prior notice, the stocks, books, records, papers, and accounts, etc. relating thereto.

a)Compliance with registration requirements.- A warehouseman shall at all times:

  • maintain effective control of the warehouse;
  • continue to be a fit and proper person as per the criteria as stated in registration rules;
  • comply with the insurance requirements as stated in registration rules;
  • maintain the prescribed minimum net worth;
  • keep updated security deposit at prescribed interval;
  • maintain the infrastructure to keep it compliant with the minimum infrastructure requirements; and
  • comply with its standard operating procedure in accordance with registration rules.

b) Know your depositor requirements.-

The warehouseman shall maintain the know your depositor (KYD) details with respect to various depositors as specified under the registration rules.

c) General obligations of a warehouseman.-

In the conduct of its warehousing business, a warehouseman shall

  • issue an (electronic) negotiable warehouse receipt only in respect of such goods that have been specified by the Authority from time to time;
  • deliver the goods referred to in an (electronic) negotiable warehouse receipt, to the holder of the (electronic) negotiable warehouse receipt on demand made by the holder after satisfying the warehousing lien;
  • ensure that the (electronic) negotiable warehouse receipt holder, on receiving the goods from the warehouseman, acknowledges the receipt of the goods in a form and manner required by the Authority;
  • take necessary actions to maintain the quality and quantity of goods stored in the warehouse;
  • maintain and record a complete and accurate set of records and accounts of all transactions pertaining to the operation of a registered warehouse as per the requirements that the Authority may specify from time to time;
  • ensure that the physical inventory tallies exactly with the record;
  • maintain effective control of all registered warehouse storage space;
  • provide necessary assistance in the execution of inspections and audits by the Authority;
  • resolve grievances efficaciously;
  • not differentiate among depositors regarding use of and access to a warehouse;
  • not store goods belonging to itself in a registered warehouse; and
  • not sell, remove or dispose of the goods deposited in a registered warehouse except as permitted under the Act.

d) Information contained in warehouse receipts.-

A warehouseman must ensure that all warehouse receipts issued by it, negotiable or otherwise, comply with the requirements of section 11 of the Act and the rules, regulations, and notifications made thereunder.

e) Mandatory registration with e-negotiable warehouse receipt repository.-

With effect from June 1, 2019, no warehouseman shall issue any negotiable warehouse receipt in physical form and shall register with one or more repositories registered with the Authority for issuing negotiable warehouse receipts in electronic form.

Disclosure of information.-

i)A warehouseman shall make written disclosure to the Authority of any of the following events, namely:-

  • any change in the key managerial persons of the warehouseman, within fifteen days of such change;
  • any change in the ownership or capital structure of the warehouseman, within fifteen days of such change;
  • any change in the net worth of the warehouseman, on a quarterly basis;
  • the occurrence of any of the events stated in sub-rule (2) of rule 17, within fifteen days of such event;
  • the initiation of a dispute in relation to the goods deposited in a warehouse or the (electronic) negotiable warehouse receipt issued in relation to the deposited goods, immediately upon the initiation of the dispute; and
  • any change in location or capacity of the warehouses managed by the warehouseman, whether registered with the Authority or not, immediately on the occurrence of such change.

ii)The Authority may, by order, require the warehouseman to make any additional disclosures and stipulate the form and manner in which disclosure is required to be made.

g)Submission of information regarding warehouse receipts.-

iii)A warehouseman shall submit monthly reports to the Authority in such form and manner, including in electronic form, as may be specified by the Authority on this behalf.

iv)The monthly reports to be submitted under this rule shall contain the following details of warehouse receipts in respect of the preceding month, namely:–

  • the total number of warehouse receipts (negotiable and non-negotiable) issued, redeemed, or cancelled;
  • the commodity wise stock position of all goods against which the warehouseman has issued warehouse receipts (negotiable and non-negotiable);
  • the aggregate market value of all goods against which the warehouseman has issued warehouse receipts (negotiable and non-negotiable) as on the last day of the preceding month; and
  • the (electronic) negotiable warehouse receipts pledged with banks and financial institutions.

v)The Authority may require additional information regarding the (electronic) negotiable warehouse receipts issued by the warehouseman, or the goods stored by the warehouseman in registered warehouses.

New Delhi, the 4th December 2020
Requirement of Security Deposit for registration of warehouse (s) with the Warehousing Development and Regulatory Authority

Revised procedure for the requirement of Security Deposit for registration of warehouses with the Authority:

  • The applicant warehouse/ Warehouse Service Provider (WSP) seeking registration of their warehouse(s) with the Warehousing Development and Regulatory Authority (WDRA) shall submit a Security Deposit to the Authority before the issue of a registration certificate. The Security Deposit shall be required to be submitted within 21 working days after the issue of communication by the Authority to this effect.
  • If the applicant fails to submit the Security Deposit within the period specified as above, the application shall be deemed to have been rejected, provided that the Authority may, if it is satisfied that the applicant was prevented by sufficient cause from submitting the security deposit within the said period of twenty-one working days, allow it to submit the security deposit within such extended time as may be decided by the Authority.
  • If the applicant submits the Security Deposit in the form and manner specified below, the Authority shall issue a certificate of registration to the applicant in respect of the warehouse to the applicant within five working days in the form specified in the Fourth Schedule of the Warehousing (Development and Regulation) Registration of Warehouses Rules, 2017.
  • Details of the amount and manner of Security Deposit to be furnished by the applicant or the warehouseman are given as under:
    1. The warehouseman shall maintain a Security Deposit to be held by the Authority during the period of registration. The Security Deposit has two components, i.e. fixed and dynamic Security Deposit. The fixed Security Deposit amount is per warehouse belonging to the warehouseman registered with WDRA, whereas, the dynamic Security Deposit is a percentage of the maximum value of negotiable and non-negotiable warehouse receipts (whether in electronic or physical form) put together with outstanding consolidative in all the registered warehouses of the warehouseman on any day during the preceding month.
  • For warehouseman with a total capacity of all warehouses up to 2000 MT belonging to the warehouseman registered with WDRA, the fixed Security Deposit is Rs. 50,000/- per warehouse (as detailed in column A below for registration of warehouses), whereas, the dynamic Security Deposit is 3% (three percent) of the maximum value of negotiable and non-negotiable warehouse receipts (whether in electronic or physical form put together) outstanding consolidative in all the registered warehouses of the warehouseman on any day during the preceding month, referred as T as mentioned in column B of Table 1 below.
  • The total security deposit of a sum of A and B for warehouseman having total warehouse capacity of all warehouses registered with WDRA up to 2000 MT, will be limited to total security deposit as detailed in column C, as given in Table I below:-

    Total registered Warehouse Capacity (in MT) for warehousemen Fixed Security Deposit Dynamic Security Deposit Total Security Deposit Limited to the amount.
    A B C
    Upto 100 MT Rs. 50,000/- per warehouse NIL Total Limited to Rs. 50,000/-
    101 – 500 MT Rs. 50,000/- per warehouse 3% of T Total Limited to Rs.2.50 lakh
    Upto 100 MT Rs. 50,000/- per warehouse NIL Total Limited to Rs.5.00 lakh
    Upto 100 MT Rs. 50,000/- per warehouse NIL Total Limited to Rs.7.50 lakh
    Upto 100 MT Rs. 50,000/- per warehouse NIL Total Limited to Rs.10.0 lakh
  • For a warehouseman with a total capacity of all warehouses above 2000 MT belonging to the warehouseman registered with WDRA, the fixed Security Deposit is Rs. 1 lakh per warehouse (detailed in the column Z in Table II below for registration of warehouses), whereas, the dynamic Security Deposit is a percentage of the maximum value of negotiable and non-negotiable warehouse receipts (whether in electronic or physical form put together) outstanding consolidative, in all the registered warehouses of the warehouseman on any day during the preceding month, referred as T in the table below. The specified percentage of the consolidated value of negotiable and non-negotiable warehouse receipts (whether in electronic or physical form) is in slabs (detailed in column X&Y in Table II below). X is the required Security Deposit in the previous slab whereas Y is Security Deposit required in the referred slab for the dynamic Security Deposit. The cumulative value of fixed (Column Z) and dynamic (Column X&Y) Security Deposit shall be maintained with WDRA as in Table II below:
  • Slab Dynamic Security Deposit Fixed Security Deposit
    X Y Z
    T is less than or equal to Rs.25 crore 0 3% of T Rs. 1 lakh per warehouse
    T is above Rs.25 crore and up to 250 crore Rs. 75 lakh 1.5% of the excess of T over Rs. 25 crore Rs. 1 lakh per warehouse
    T is above Rs.250 crore and up to 2,500 crore RRs. 4.125 crore 1% of the excess of T over Rs. 250 crore Rs. 1 lakh per warehouse
    T is above Rs.2,500 crore Rs. 26.625 crore 0.5% of the excess of T over Rs. 2500 crore Rs. 1 lakh per warehouse
  • ii. The fixed Security Deposit shall be maintained for a period of six months beyond the registration period whereas the dynamic Security Deposit shall be updated at the end of each month and submitted to the Authority which shall be duly acknowledged. The validity of dynamic Security Deposit can be kept for a period of a minimum of six months so as to take care of any changes in the requirement of Security Deposit during this period.
  • iii. The Authority may, at its discretion, adjust the Security Deposit already furnished by the warehouseman against the amount required to be furnished as Security Deposit.
  • iv. Where the applicant/ warehouseman is a Farmer Producer Organization or a PACCS, the total Security Deposit would be Rs. 50,000 (total) per warehouse covering both the dynamic and fixed Security Deposit.
  • v. The Security Deposit shall be in the form of Bank Fixed Deposits or in form of Bank Guarantee, favouring WDRA as per the format given in First Schedule for a period of six months beyond the expiry of Registration.
  • vi. The Authority may allow any entity created under an Act of Parliament or of the State legislature to provide, an Indemnity Bond for the amount required as Security Deposit, as per format given in the Second Schedule.
  • vii. An entity allowed by the Authority to submit an Indemnity Bond shall submit, along with its application for registration, a resolution from its Board of Directors authorizing to furnish such Indemnity Bond.
  • viii. The Security Deposit shall not be released until six months after expiry, cancellation or surrender of the registration of the warehouse or until after satisfaction of every claim against the Security Deposit, whichever is later.
  • ix. The Authority shall refund the security deposit in respect of a warehouse, if–
    1. The warehouseman shall maintain a Security Deposit to be held by the Authority during the period of registration. The Security Deposit has two components, i.e. fixed and dynamic Security Deposit. The fixed Security Deposit amount is per warehouse belonging to the warehouseman registered with WDRA, whereas, the dynamic Security Deposit is a percentage of the maximum value of negotiable and non-negotiable warehouse receipts (whether in electronic or physical form) put together with outstanding consolidative in all the registered warehouses of the warehouseman on any day during the preceding month.
    2. a warehouseman surrenders his certificate of registration, and the Authority accepts such surrender; or
    3. the certificate of registration of a warehouse is cancelled, and the Authority is satisfied that the warehouseman has discharged his obligations as per the requirements of the rules.
  • x. Notwithstanding such revision of the Security Deposit as specified at (i) & (ii) above, if any, the warehouseman shall not increase the charges payable by the depositors within the period of validity of negotiable warehouse receipts issued to them.
The First Schedule
(Format for Bank Guarantee for Security Deposit Payment to be submitted by Warehouseman)

Director (Administration & Finance) Warehousing Development and Regulatory Authority (WDRA) NCUI Building (4th Floor),
3, Siri Institutional Area, August Kranti Marg,
Hauz Khas, New Delhi – 110016 (With due stamp duty as applicable)

OUR LETTER OF GUARANTEE No:
  • In consideration of Warehousing Development and Regulatory Authority, having its office at NCUI Building (4th Floor), 3, Siri Institutional Area, August Kranti Marg, Hauz Khas, Delhi – 110016 (INDIA) (hereinafter referred to as “WDRA” which expression shall unless repugnant to the content or meaning thereof include all its successors, administrators and executors) and having considered granting/granted registration of the warehouse (s), namely, or as per list annexed with this schedule (duly endorsed by the Bank) belonging to M/s (hereinafter referred to as “The Warehouseman” which expression unless repugnant to the content or meaning thereof, shall include all the successors, administrators, and executors).
  • WHEREAS the Warehouseman having unequivocally accepted to conduct the business of warehousing as per terms and conditions given in the Warehousing (Development and Regulation) Registration of Warehouses Rules, 2017 (hereinafter referred as the Rules) and having agreed to furnish to WDRA a Security Deposit in the form of a Bank Guarantee for Rs......... (Rupees................ only) for the faithful performance of the entire registration with the WDRA, we. (hereinafter referred to as "the Bank") at the request of the warehouseman do hereby undertake to pay to the WDRA an amount not exceeding Rs …… against any loss or damage caused to or suffered by the holder of the negotiable warehouse receipt due to breach by the warehouseman of any of the terms and conditions contained in the Rules and the notification No dated ……on “Requirement of Security Deposit for registration of warehouses with the WDRA” (hereinafter referred as the notification).
  • We........................................................ (Name of the Bank) do hereby undertake to pay the amount due and payable under this guarantee without any demur merely on a demand from the WDRA stating that the amount claimed is due by way of loss or damage caused to or suffered by the holder of the negotiable warehouse receipt due to breach by the warehouseman of any of the terms and conditions contained in the Rules and the notification. Any such demand made on the bank shall be conclusive as regards the amount due and payable by the Bank under this guarantee. However, our liability under this guarantee shall be restricted to an amount not exceeding Rs.........
  • We undertake to pay to the WDRA any money so demanded notwithstanding any dispute or disputes raised by the warehouseman in any suit or proceeding pending before any court or Tribunal relating thereto, our liability under this present being absolute and unequivocal. The payment so made by us under this bond shall be a valid discharge of our liability for payment thereunder and the warehouseman shall have no claim against us for making such payment.
  • We............................................................................................ (Name of the Bank) further agree that the WDRA shall have the fullest liberty without our consent and without affecting in any manner our obligations hereunder to vary any of the terms and conditions of the said Agreement or to extend time of performance by the warehouseman from time to time or to postpone for any time or from time to time any of the powers exercisable by the WDRA against the warehouseman and to forbear or enforce any of the terms and conditions relating to the said Agreement and we shall not be relieved from our liability under terms and conditions relating to the said Agreement and we shall not be relieved from our liability by reason of any such variation, or extension being granted to the warehouseman or for any forbearance, act or omission on the part of the WDRA or any indulgence by the WDRA to the warehouseman or by any such matter or thing whatsoever which under the law relating to sureties would, but for this provision, have effect of so relieving us.
  • This guarantee will not be discharged due to the change in the constitution of the Bank or the warehouseman.
  • We, ...................................................................................... ............. (Name of the Bank) lastly undertake not to revoke this guarantee during its currency except with the previous consent of the WDRA in writing.
  • Notwithstanding anything contained herein:-
    1. Our liability under this Bank Guarantee shall not exceed ......... (Rupees only)
    2. This Bank Guarantee shall be valid up to and,
    3. We are liable to pay the guaranteed amount or any part thereof under this Bank Guarantee only and only if the WDRA serve upon us a written claim or demand on or before........

............................................ (Date of expiry of guarantee)

Dated the............................ day of 20

Name of Authorized Signatory/ Manager For (Name of the Bank)

Branch

Seal of the bank

The Second Schedule INDEMNITY BOND

This indemnity is executed by deed on the day of 201 by _(an entity created under the Act of the Parliament or of the State Legislative) hereinafter called “ENTITY” in favour of the Warehousing Development and Regulatory Authority (WDRA) hereinafter called “AUTHORITY”

WHEREAS:
  • The Warehousing Development and Regulatory Authority (hereinafter referred as Authority) is established under the Warehousing (Development and Regulation) Act, 2007 (Act, 2007) with the objective to regulate and ensure implementation of the provisions of Act, 2007 for the development of warehouses, regulations of negotiability of Warehouse Receipts and promote orderly growth of warehousing business. Every person desirous of commencing or carrying business of maintaining a warehouse issuing negotiable warehouse receipts is required to be registered and for that purpose, an application has to be made to the Authority under the Act, 2007.
  • Every applicant warehouse/Warehouse Service Provider (WSP) seeking registration of their warehouse shall be required to submit a security deposit to the Authority within 21 days of the communication by the Authority.
  • The value of security deposit (in the form of bank guarantee in favour of Warehousing Development and Regulatory Authority) to be deposited by warehouseman and to be maintained during the period of registration and to be updated at the end of each month is as follows: -
  • Slab Dynamic Security Deposit Fixed Security Deposit
    A B C
    T is less than or equal to Rs.25 crore 0 3% of T Rs. 1 lakh per warehouse
    T is above Rs.25 crore and up to 250 crore Rs. 75 lakh 1.5% of the excess of T over Rs. 25 crore Rs. 1 lakh per warehouse
    T is above Rs.250 crore and up to 2,500 crore Rs. 4.125 crore 1% of the excess of T over Rs. 250 crore Rs. 1 lakh per warehouse
    T is above Rs.2,500 crore Rs. 26.625 crore 0.5% of the excess of T over Rs. 2500 crore Rs. 1 lakh per warehouse

    Note: - Here ‘T’ is referred in the above Table as the highest value of total outstanding negotiable warehouse receipts in over the preceding month for all the warehouses registered by the warehouseman.

  • The Authority may at its discretion, adjust the security deposit already furnished by the warehouseman against the amount required as a security deposit. The security deposit shall not be released until six months after cancellation, rejection or surrender of the registration of the warehouse or until after satisfaction of every claim against security deposit whichever is later. The Authority reserves its rights to revise the amount of security deposit.
  • As the Authority may allow any entity created under an Act of the Parliament or State Legislative and carrying business of maintaining warehouse (s) and issuing Negotiable Warehouse Receipt, to submit Indemnity Bond in lieu of security deposit and the Entity allowed by the Authority to submit an Indemnity Bond shall submit, along with its application for registration, a resolution from its Board of Directors authorising the furnishing of such Indemnity Bond.

NOW therefore M/s …………………………..(name of the entity) established under ……………………………… Act, agrees and undertakes at all times to save, defend, and indemnify and keep indemnified the Authority from and against all actions, suits, proceedings, accounts, claims and demands whatsoever for an amount of Rs………(Rupees only) (as detailed at Annexure) to the extent of limits to be worked out as per Para ‘c’ above and as per the conditions of this indemnity bond noted below: -

  • M/s ………………………………..(name of the entity) shall comply with all the obligations to be performed on their part under the Authority’s rules and regulations.
  • M/s (name of the entity) undertakes to keep the Authority indemnified for an amount to be worked out as per the Table in Para ‘c’ above until six months, after cancellation, rejection or surrender of registration or until after satisfaction of every claim whichever is later.
  • M/s ………………………………..(name of the entity) shall be discharged of its obligation under Indemnity Bond in respect of a warehouse, if: -
    • An application for renewal of registration of the warehouse has been rejected and if the Authority is satisfied that the warehouseman has discharged his obligations as per the requirements of the rules;
    • A warehouseman surrenders his certificate of registration, and the Authority accepts such surrender; or
    • The certificate of registration of a warehouse is cancelled, and the Authority is satisfied that the warehouseman has discharged his obligations as per the requirements of the rules.
    • M/s. ………………………………..(name of the entity) undertakes not to increase the charges payable by depositors within the period of Negotiable Warehouse Receipts issued to them.
    • M/s. ………………………………..(name of the entity) hereby agrees that in case any losses/damages if suffered by the Authority (to the extent of Para ‘c’ above), the same shall be indemnified by M/s. ………………………………..(name of the entity).
    • This Indemnity Bond shall have validity till day of (month) 201……. In witness whereof signed this Indemnity Bond is executed on this _ day of _ 201 .

EXECUTOR NAME:

DESIGNATION:

ORGANISATION:

(With Seal)

In the presence of witnesses: -
1)
2)

Annexure to the Second Schedule
Details of warehouses included in the Indemnity Bond
Sl. No. Name and Address of the Warehouse Capacity in MT

Application fees for registration and renewal with the Authority

Unit of registration Fee
Each warehouse with a capacity of up to 500 Ton Rs. 5,000/-
Each warehouse with a capacity of more than 500 Ton but less than or equal to 1,000 Ton Rs. 7,500/-
Each warehouse with a capacity of more than 1,000 Ton but less than or equal to 2,500 Ton Rs. 10,000/-
Each warehouse with a capacity of more than 2,500 Ton but less than or equal to 5,000 Ton Rs. 15,000/-
Each warehouse with a capacity of more than 5,000 Ton but less than or equal to 10,000 Ton Rs. 20,000/-
Each warehouse with a capacity of more than 10,000 Ton but less than or equal to 25,000 Ton Rs. 25,000/-
Each warehouse with a capacity of more than 25,000 Ton Rs. 30,000/-

Where the applicant or warehouseman is a Farmer Producer Organisation or a Primary Agricultural Cooperative Credit Society, the fee shall be Rs. 5,000 per warehouse.”

Minimum net worth requirements for registration with the Authority

Upto 500 0.04
501 – 1,000 0.08
1,001 – 1,500 0.12
1,501 – 2,000 0.16
2,001 – 2,500 0.20
2,501 – 5,000 0.40
5,001 – 7,000 1.00
7,001 – 10,000 2.00
10,001 – 15,000 5.00
15,000 – 25,000 10.00
25,001 – 75,000 20
75,001 – 1,50,000 30
1,50,001 – 5,00,000 50
5,00,001 and above 100

Where the applicant or warehouseman is a Farmer Producer Organisation or a Primary Agricultural Cooperative Credit Society, the net worth shall be positive.”

National Commodity Clearing Limited (NCCL) is a wholly-owned subsidiary of the National Commodity & Derivatives Exchange Ltd. (NCDEX) which is India’s leading agri-commodity exchange. NCCL is responsible for clearing and settlement services of all trades executed on the exchange and is committed to providing a robust and transparent risk management platform for the collective benefit of the agri-ecosystem.

List of empaneled WSPs is available on the website of NCCL and can be found at the following link https://nccl.co.in/warehousing/wsp/exchange-empanelled-wsps

The list and details of the contact person of warehouses approved by NCCL for delivery is available on the website of NCCL and can be found in following link https://nccl.co.in/warehousing/warehouse-data under the description ‘Approved warehouses for delivery as on

Warehouse and Assaying charges are available on the NCCL website at the following link https://nccl.co.in/warehousing/warehouse-data under the description ‘Indicative storage and assaying charges’.

Yes, you should open a repository account with any of the repository participants of National E- repository Limited (NeRL)before physically depositing goods in warehouses approved with NCCL. “Repository Account Opening Manual” is available on NeRL website at the link http://nerlindia.com/wp- content/uploads/2020/01/NERL-ACCOUNT-OPENING-MANUAL-v1.3.pdf and may be referred for general guidelines and other requirements for opening an account.

Yes, it is mandatory to book space before depositing goods in the Warehouses approved by NCCL. For this, you need to use the Warehouse Space Reservation system (WSR) and initiate a booking request through your e-Repository login credentials into NERL Warehouse Space Reservation System (URL: https://wsr.erepository.in). The detailed process with respect to WSR is available in “WSR User Manual” on NeRL Website.

What are the rules related to the Warehouse Space Reservation system?

  • The booking window for initiating booking requests by participants/clients will be open from 9.00 a.m. to 5.00 p.m. on all days.
  • Each participant will be allowed to book a space of a maximum of up to 500 MT per Warehouse per day or as may be notified by NCCL from time to time.
  • Booking charges will be levied as per the structure notified by NeRL from time to time.
  • Rights to modify any parameter in this system shall rest with the Exchange/NCCL.
  • E-Mail confirmations informing about the status of their booking will be sent on a registered Email ID
  • Participants are requested to check their registered Email id for the accurate receipt of email confirmations.
  • At the time of initiating a Booking request, the depositor participant will be asked to select a Deposit End date.
  • The deposit start date is automated and fixed on Booking day. The booking period i.e. difference between a deposit start date and deposit end date is a maximum of 7 calendar days.
  • The entire quantity under a Booking request should be deposited before the deposit end date. Any quantity remaining to be deposited thereafter will not be accepted for deposit in the said Warehouse under the said Booking request.
  • The depositing participants shall make the required payment towards advance Warehouse charges to the WSP concerned and communicate the payment details along with the Booking request ID to the respective WSP on the Booking day.
  • Upon confirmation of booking requests, the WSP will be able to do the scheduling of day-wise deposits in consultation with the depositing clients/participants.

Yes, it is mandatory to submit information as required in the Know Your Depositor (KYD) form. KYD forms are available on the website of respective warehouse service providers. Any person or entity desirous of depositing goods in the approved warehouse of NCCL must submit information in the prescribed formats. You may refer to the website of the respective WSP for the formats. The gist of the required KYD forms and their respective frequency of submission is detailed below:

Format Frequency To be filled by
Annexure 1 One time for each WSP Any resident individual (including a sole proprietor) who deposits goods (irrespective of whether he deposits the goods on his own account or on behalf of another beneficiary)
Annexure 2A One time for each WSP Any non-individual (i.e., Company or LLP) who deposits goods (irrespective of whether he deposits the goods on his own account or on behalf of another beneficiary)
Annexure 2B One time for each WSP Any non-individual (i.e., Partnership firm) who deposits goods (irrespective of whether he deposits the goods on his own account or on behalf of another beneficiary)
Annexure 3 At the time of each deposit covered by a single Warehouse Space Reservation Request(WSR) Any individual/non-individual who deposits goods (irrespective of whether he deposits the goods on his own account or on behalf of another beneficiary)

Yes, you need to contact the warehouse before sending your trucks. It is advised to take a schedule of deposit from the warehouse to avoid delays in the unloading of your trucks at the warehouse.

Yes. The WSP will acknowledge receipt of physical goods in its warehouse. Corresponding electronic credit after applicable deductions will also be affected by the WSP in your repository account in the due course of time.

Yes, you are permitted to carry out a physical inspection of your goods in NCCL approved Warehouses if you are having commodity balances in your electronic repository account. You will have to submit a request to NCCL for permitting physical inspection. The process to be followed for the purpose of requesting physical inspection is available on the NCCL website is given in the link below. https://nccl.co.in/warehousing/wsp/process-for-physical-inspection-of-goods-in-approved- warehouses-by-holders

Yes. You will have to make a request to NCCL for appointing an assayer for allowing sampling at the time of lifting of goods from the Warehouse and testing of these samples by the NCCL appointed assayer for the purpose of verification of the quality of commodity which is received by you against a buy obligation on the Exchange platform. It is important to note that such requests should be made before the EDD of the goods stored in NCCL approved Warehouses and reflected in your repository account. Further, such a request should be made on the submission of all documents to the WSP. The framework for sampling at the time of taking physical delivery is available on our website at https://nccl.co.in/warehousing/wsp/frame-work-for-sampling-at-the-time-of-taking-physical-delivery

Your presence during Remat Testing is not mandatory. You may appoint and authorize your representative for witnessing the procedures. Alternately, as the assayer appointed by the Clearing Corporation is an Independent Assayer, you may also choose to inform the Remat Assayer to go ahead with the testing in your absence.

A report indicating the average value of quality parameters of selective commodities stored in NCCL approved warehouses is updated on the NCCL website on a fortnightly basis. The report named “Average value of quality parameters of selective commodities” is available at the following link https://nccl.co.in/warehousing/warehouse-data

A report indicating details of space booking requests received through the Warehouse Space Reservation (WSR) system is published on the NCCL website on a daily basis. The report named “Warehouse Space Reservation (WSR) Details” is available at the following link https://nccl.co.in/warehousing/warehouse- data

Such information is contained in the report called “Withdrawal Status” updated by NCCL on a quarterly basis available at the following link https://nccl.co.in/warehousing/warehouse-data

National Commodity & Derivatives Exchange Limited (NCDEX) is a professionally managed online multi commodity exchange. The shareholders of NCDEX comprises of large national level institutions, large public sector bank, and companies.

Farmers Producer Organisation means any legal entity formed by farmers and registered as a producer Organisation under the below Acts:

  • Cooperative Societies Act/ Autonomous or Mutually Aided Cooperative Societies Act of the Respective State;
  • Multi-State Cooperative Society Act, 2002;
  • Companies Act, 1956/Companies Act, 2013;
  • Society Registration Act, 1860;
  • Indian Trusts Act, 1882.

Futures are financial contracts requiring the buyer to purchase an asset or the seller to sell an asset, such as a physical commodity or a financial instrument, at a predetermined future date and price. Futures contracts detail the quality and quantity of the underlying asset; they are standardized to facilitate trading on a futures exchange. Some futures contracts may call for physical delivery of the asset, while others are settled in cash. It is also a temporary sell or buy position taken by the seller or the buyer before an actual sell or buy transaction takes place.

Long position: When a buy position is created in any contract it is termed as a long position, i.e. Buys or Purchases contract on the Futures exchange.

Short position: When a sell position is created in any contract it is termed as a short position, i.e. Sells contract on the Futures exchange.

Margin in the futures market refers to an initial good faith deposit – essentially, a down payment on the full contract value. The exchanges set the minimum amount of money a Buyer or a Seller must deposit with an Exchange account to trade in futures contracts.

For example: Chana near-month futures price is Rs. 4000/quintal. The minimum trading lot size of Chana at NCDEX is 10 MT, so the value of one lot (10 MT) is Rs. 4,00,000. The minimum initial margin to trade in NCDEX Chana futures is 4%. Accordingly, if FPO wishes to sell at Rs. 4000/quintal they have to deposit Rs. 16,000(4,00,000 * 4%) before initiating the sell trade.

  • Initial margin
  • Extreme Loss Margin (ELM)
  • Additional Margin
  • Special Margin
  • Pre-expiry Margin
  • Delivery Margin
  • Concentration Margin
  • Mark to mark Margin

The outstanding (already created) positions in the Futures contract has to be marked to market daily based on the Daily Settlement Price (DSP) as determined by the Exchange at the end of each trading day. There are two counterparties on either side of a futures contract - a buyer and a seller. If at the end of the day, the futures contract in which the position is created goes down in value, the buyer account will be debited and the seller account credited to reflect the change in the value of the position. Conversely, an increase in value results in a credit to the buyer and debit to the seller.

FPO has to deposit the initial margin before initiating a trade (position).

FOne can refer to www.ncdex.com -> Products -> Agri products -> select desired commodity -> links -> 1) contract specs

Yes, in a few commodities there is quality premium and discount depending on the nature of the parameter. One can check the same on the NCDEX website. www.ncdex.com -> Products -> Agri Products -> Select the commodity -> Links -> Contract Specs

Agricultural commodities are perishable in nature i.e. after a certain time period the quality starts going down – deteriorate. This leads to a time frame or validity, after which the commodity is not usable in its current form.

Yes, NCDEX has defined the commodity-wise validity structure for all commodities. It varies between 4-9 months from commodity to commodity.

Yes, NCDEX has defined the commodity-wise validity structure for all commodities. It varies between 4-9 months from commodity to commodity.

An indicative list of documents is provided below:

  • Mandi license with Agri market yard near to FPO’s base location
  • GST registration of FPO
  • Registration (Know Your Depositor) with the warehouse service provider (WSP)

Every depositor has to book the desired warehouse space through the warehouse space reservation system. The booking window in WSR operates between 10 am to 4:30 pm. A user guide explaining more details of this process is given on the NERL website www.nerlindia.com -> Comtrack -> Downloads -> Warehouse space booking request https://www.nerlindia.com/comtrack/downloads/WSR%20Client%20User%20Guide%20Mobile%2 0App%20new.pdf

An excel sheet is attached with this note detailing the commodity-wise quality of bags accepted for deposits in NCDEX.

Warehouse charges levied by Exchange differ from commodity to commodity. Commodity wise warehouse charges is given on NCDEX website www.ncdex.com - > Clearing -> Others -> Indicative warehouse charges To support participation, NCDEX endeavours to reduce the warehouse rent for FPOs

FPO will have to take back the commodity lot from the relevant warehouse after paying the applicable warehouse charges.

The commodity holding balance can be checked in the Repository a/c through their Repository Participant/Member

Exchange levies maximum of 0.006% as Transaction charges, 0.004% as Risk management fees, and 0.15% as delivery charges. GST is charged on all the above-mentioned charges @18%.

To take physical delivery from the warehouse, FPO will have to submit a withdrawal request to its Repository participant (where the Repository a/c is opened). Repository participant will pass on that request to NERL (National E-Repository Ltd.) and the WSP (Warehouse Service Provider) for verification. Post verification, the FPO can go to the relevant warehouse with an appropriate vehicle and withdraw the commodity after confirmation from the warehouse.

FPO has to generate the invoice and with the help of clearing member (where the trading a/c is opened) upload it on the National Clearing Corporation Ltd (NCCL) portal. The uploaded invoice has to be approved by the buyer within the stipulated time frame. Post-approval of invoice by the buyer, FPO will dispatch the invoice to its clearing member, who will then dispatch the invoice to the buyer's clearing member.

FPO needs to open Trading and Repository a/c with Exchange and Repository Participants respectively. The list of documents needed to open the a/c are:

  • Account opening form filled and signed with Seal of the company (Authorised Signatory) at all the places (marked ‘√’ for client signature) by the authorized signatories
  • PAN Card of the company (attested by any director)
  • Address proof of company (attested by any director)
  • Certified true copies of Memorandum & Articles of Association (all pages attested by any director)
  • Banker’s authorization letter (For signature verification of authorized Directors)
  • Copy last two year’s ITR (Income tax return)
  • Copy of Board Resolution on letter head of company (As per prescribed format) with seal of the company (all pages attested by any director)
  • Last six months Bank statement (all pages attested by any director) with one cancelled cheque leaf
  • Copy of latest shareholding pattern (direct & indirect) (all pages attested by any director)
  • Latest audited annual report of the company (all pages attested by any director)
  • Copy of Aadhar and PAN card of all directors (self-attested)
  • List of directors (as given on ministry of corporate affairs website) on letter head of company. Status of the company on the ministry of corporate affairs website should be ‘Active’.
  • List of authorized signatories with photograph and specimen signature

‘Early pay-in’ (EPI) is a facility provided to market participants permitting them to deposit certified goods in the NCCL approved warehouse against relevant futures contracts sold and tender goods towards their settlement obligation before the due date to avail benefits of early pay-in.

Short positions against which early pay-in has been made by the FPO client shall be exempt from imposition of all types of margins except concentration margin.

All the following types of margins shall be exempted against early pay-in of commodities including:

  • Initial Margin
  • Extreme Loss Margin (ELM)
  • Additional Margin
  • Special Margin
  • Pre-expiry Margin
  • Delivery Margin

The margins exemption shall be available on the quantity tendered in early pay-in subject to the short open position in the contract against which such early pay-in is marked. So the maximum quantity which shall be considered for calculating margin exemption will be lower of EPI quantity or short open position in the contract against which EPI has been marked. Example: Client has a short open position of 100 MT and against this position marks EPI of 150 MT, the margin exemption shall be available only on 100 MT position. Similarly, if a member gives an EPI of 50 MT against its client’s short open position of 100 MT, the margins exemption shall be available only on 50 MT position.

Yes. Members are required to inform NCCL, the details of clients under the FPO category to claim the benefit of ‘Early pay-in’ before marking an EPI.

The members for their FPO clients can make ‘Early pay-in’ of a commodity at any time for a short position in a contract after the start of trading in such contract on the NCCL platform.

Members are required to submit early pay-in (EPI) requests using the Web NCFE system of the Clearing Corporation. While marking EPI members are required to select contract expiry in which the client is holding the short positions, after the start of trading in the respective contract. Example: In case the client intends to make an Early Payin against a short position in December 2018 Contract (Expiry date – 20th December 2018) say on 5th of September 2018, the member while marking EPI needs to select the Expiry date i.e. 20th December 2018. If the client wants to tender delivery during the tender period of December 2018 Contract member shall mark the delivery intention accordingly. The EPI marked on the 5th of September 2018 shall be considered towards commodity pay-in.

The daily mark to market gains/losses on FPO positions where early pay-in is marked shall be accumulated by NCCL for a deferred settlement till the completion of delivery settlement for such FPO positions. The Clearing Corporation shall compute the amount to be debited/credited based on daily settlement price/trade price from the date when EPI is marked in the system for such short positions. Accordingly, the MTM losses shall be funded by NCCL from its own sources and MTM gains shall be retained by the NCCL.

NCCL shall continue to compute obligations at the member level as per the existing process. The daily obligation of the Member will include the MTM obligation of the FPO client for the short open position against which early pay-in is marked. The clearing member would be required to settle the entire obligation amount.
However, on daily basis, NCCL shall transfer an amount equivalent to the MTM pay-in arising out of FPO clients’ position to respective clearing members’ settlement account. Conversely, in the case of MTM gains, NCCL shall debit the members’ settlement account with an amount equivalent to the MTM pay-out (gains) of the FPO client.
Example:

Day 1 Day 2 Day 3 Day 4
Client 1 30,000 -10,000 20,000 -10,000
Client 2 40,000 -20,000 10,000 -20,000
Client 3 (FPO Client EPI position ) 30,000 -50,000 -60,000 -30,000
Client 4 10,000 -10,000 10,000 -20,000
MTM Obligation of Member
Pay-in 20,000 80,000
Payout 50000 10000
Debit/Credit in Members Settlement account with respect to FPO Clien
Debit 50000
Credit 30000 60000 30000

Daily mark-to-market profit/ loss for the FPO client for the short open position against which early pay-in is marked shall be accumulated by the Clearing Corporation for a deferred settlement till the completion of delivery settlement. Accordingly, on daily basis NCCL shall debit the Members Settlement account in case of MTM gains of FPO client and credit the Members Settlement account in case of MTM loss to the FPO client on positions against which EPI is marked. NCCL shall continue to compute obligations at the member level as per the existing process. The settlement obligation of the Member will include the Final Settlement obligation of the FPO client for the short open position against which early pay-in is marked. Upon final delivery, the net amount funded by NCCL towards MTM loss shall be debited from the Members account or the MTM gains retained by NCCL shall be credited in the members’ account.

No. The members have to mark delivery intentions separately as per the schedule provided in the Settlement calendar issued by the Clearing Corporation. Early pay-in would not in any manner be automatically construed as delivery intention.

No. Daily settlement on account of losses arising on account of FPO shall be made good from NCCL’s own resources. NCCL shall transfer an amount equivalent to the MTM pay-in arising out of FPO clients’ position to respective clearing members’ settlement account. The member shall post such credit to the account of the FPO client and accordingly, there is no need for the FPO client to bring in funds towards MTM Pay in obligation.

Yes. The funding from NCCL for Mark-to-market settlement for the FPO client shall be capped at Rs.25 lakhs for a single FPO and Rs 500 lakhs across all FPOs, until further review. Mark to Market settlement in excess of the defined exemption limits shall be collected from the Clearing Member, who in turn would be required to collect the same from the FPO client.

Yes. On daily basis members account will be debited or credited based on the MTM for FPO client for the specific transaction against which early pay-in has been made. The member shall post such credit or debit to the account of the FPO client. The MTM obligation funded by NCCL can be considered towards compliance of the collection of MTM for margin reporting.

Members applying for exemption shall ensure that the short open position of such FPOs are not squared off after claiming such exemption. In the event of square-off, the cumulative net Mark to Market settlement from the time the EPI has been marked till the date of square-off would be computed. In case of cumulative losses, the MTM funded by NCCL shall be recovered from the member and in case of cumulative gains, the same shall be paid to the member.

In case the open position is squared off after marking an early pay-in, such EPI lots will be returned to the member after the Expiry of the contract.

No. It is mandatory only for those members who are trading on account of their clients, for others i.e. members indulge only in PRO trade can take such policy as per their requirement. Please refer Circular no. NCDEX/MEMBERSHIP-009/2008/264 dated November 21, 2008 for further details.

No. Separate member client agreement is to be executed for each of the commodity Exchange for which member is offering broking services to the client.

Yes. Please refer circular no. NCDEX/Legal-005/2004/091 dated July 22, 2004 on Issue of Contract Notes under Digital Signature. For maintenance of copies (soft or hard copies) of the digital contract notes so issued, may be confirmed from Inspection Section.

As per the guidelines issued by the Exchange, prior approval of the Exchange is required to be taken by the member for using the logo. Please refer to circular no. NCDEX/LEGAL-003/2005/046 dated February 22, 2005 for further details. Please also refer circular no. NCDEX/LEGAL-007/2004/158 dated November 5, 2004 on Use of NCDEXs Logo.

No, members may not insist upon copies of income tax return. Please refer Circular no. NCDEX/COMPLIANCE-001/2009/045 dated February 13, 2009 for further details.

Neither our Rules/Bye Laws/Regulations nor Forward Contracts (Regulation) Act prohibits members from undertaking any other business activities. Please refer to circular no. NCDEX/COMPLIANCE-003/2008/285 dated December 23, 2008 restricting portfolio management and advisory services by the member. However, there are restrictions on the members, who are registered with Stock Exchanges, to deal in other than securities.

The Exchange has so far not stipulated the appointment of Compliance Officer as mandatory and the member need not communicate the same to the Exchange.

There is no directive or a circular by the Exchange on any limit on the Commission/Brokerage that can be charged by the member. There is no minimum brokerage prescribed by the Exchange till date

Please refer circular no. NCDEX/COMPLIANCE-002/2006/238 dated September 19, 2006 on Display of details at members office.

Guidelines for issue of advertisement by the members are given in circular no. NCDEX/LEGAL-003/2005/046 dated February 22, 2005. Please refer to the same.

Members should not undertake any advisory services in the nature of portfolio advisory services, portfolio management services and similar such other advisory services resulting in fund based portfolio management services to clients for investment in commodities future contracts. Please refer circular no. NCDEX/COMPLIANCE-003/2008/285 dated December 23, 2008 for further details.

In case of inoperative client code/accounts any new requests for orders to trade should be accepted only on receipt of specific written request from the client for permission to trade along with completion of all required formalities of KYC, if necessary. Please refer circular no. NCDEX/MEMBERSHIP-001/2008/076 dated April 4, 2008 for further details.

Please refer circular no. NCDEX/LEGAL-003/2004/045 dated April 21, 2004 for Revised Contract Note Format

No.As per the provisions of our Bye Laws 6.7.1 and Regulation 4.1, read along with Bye law 7.2 regarding prohibition on trading members to trade through another trading member unless approved by the Exchange. Even member allowing other member to trade through him as a client would face similar penal action. Please refer circular no. NCDEX/Compliance-001/2005/103 dated May 4, 2005 for the penal provisions.

No Prior approval of the Exchange is required only in case the member is not following the guidelines issued by the Exchange in this regard or the member wish to use the logo of the Exchange. Please refer to circular no. NCDEX/LEGAL-003/2005/046 dated February 22, 2005 for further details.

There are many CTCL vendors and the number of CTCL Terminals provided on one CTCL user id would be decided by the CTCL vendor.

The course module and the study materials is being complied and the same will be made available on our website. The core dealer is expected to pass the exam on or before the date stipulated by NCDEX.

No, the membership availed at the first instance is composite one and will be valid for all the products which are to be traded on NCDEX.

No, the membership availed at the first instance is composite one and will be valid for all the products which are to be traded on NCDEX.

Upon the provisional admission as NCDEX member and being advised on the same by NCDEX, the prospective members are required to comply with the networth requirements in 2-3 weeks time.

Separate VSat connectivity is required.

No, HUF is currently not permitted for NCDEX membership.

In case of newly formed companies, only current balance sheet needs to be submitted.

Net worth of the new entity should be Rs 50 lacs. Please follow the procedure explained in detail in Annexure C-1A of the application form to calculate the networth.

NCDEX is a professionally managed, nation wide, on-line multi-commodity exchange promoted by ICICI Bank Ltd, National Bank for Agriculture and Rural Development (NABARD), Life Insurance Corporation of India (LIC), and National Stock Exchange (NSE). NCDEX is a technology driven de-mutualised commodity exchange with an independent board of directors and professionals not having any vested interest in commodity markets. It is committed to provide a world class commodity exchange platform for market participants to trade in a wide spectrum of commodity derivatives driven by the best global practices of professionalism and transparency. ; The four institutional promoters of NCDEX are prominent players in their respective fields and bring with them institutional building experience, trust, nation wide reach, technology and risk management skills.

It is desirable, however, we will consider waiving the same in case of persons having adequate experience in commodity market, financial markets.

National Commodity and Derivatives Exchange Ltd (NCDEX) is a public limited company registered under The Companies Act, 1956 with the Registrar of Companies, Maharashtra in Mumbai on April 23,2003. The registration no of NCDEX is U51909 MH 2003 PLC 140116

There are no additional costs other than what is stated in the application form.

The exchange does not stipulate any directives in this regard and it is free to be bilaterally decided between client and member of the exchange.

Futures trading in commodities results in transparent and fair price discovery on account of large scale participations of entities associated with different value chains and reflects views and expectations of wider section of people related to that commodities. This also provides effective platform for price risk management for all segments of players ranging from the producers, the traders, processors, exporters/importers and the end users of the commodity. The trading on futures contract on our platform will be facilitated on an online platform for market participants to trade in a wide range of commodity derivatives driven by the best global practices of professionalism and transparencies. We have provided with more details on the entire gamut of commodity trading in India in general and on NCDEX in particular in our website under "Presentations". Please visit our website www.ncdex.com.

Subject to Forwards Market Commission approval, 9 commodities, viz, Gold, Silver, Cotton, Soyabean, Soyaoil, Rape/Mustardseed, Rape/Mustard oil, Crude Palm Oil and RBD Palmolein are the commodities that will be traded in the first phase. NCDEX proposes to trade in all the major commodities approved by FMC.

For trading cum clearing member (TCM) the criteria is as follows: Net worth of Rs 50 lacs Interest free deposit of Rs 15 lacs towards base capital Collateral deposit of Rs 15 lacs in form of bank guarantees, fixed deposit. GOI securities.

The trade timings of the exchange are 10.00 a.m. to 4.00 p.m. It is also proposed to have after hours trading also.

The trade timings of the exchange are 10.00 a.m. to 4.00 p.m. It is also proposed to have after hours trading also.

Collateral security could be in the form of bank guarantee, RBI Bonds, fixed deposits and Government of India Securities. These certificates have to be deposited with the NCDEX and the same will be refunded on relinquishment of the membership.

The lock in period for the interest free security deposit fee is three years and three months.

The dominant promoter group stipulation is applicable in case of partnership firms, private limited companies and unlisted public companies. As per this stipulation, a group of not more than 4 individuals (who directly / indirectly hold more than 51% of capital in the firm / company) need to be identified as the key promoters of the entity. This exercise is an effort by NCDEX to identify and understand the individuals, who are the driving forces of the entities applying for membership on NCDEX

The membership forms will be processed at our end and in case of any additional information, the same will be called for. If found in order, the applicants will be subsequently called for personal interaction with the membership committee of NCDEX. Successful applicants will be intimated by NCDEX.

The main objective clause to be inserted in the Memorandum of Association is : To carry on the business of trading in agricultural products, metals including precious metals, precious stones, diamonds, petroleum and energy products and all other commodities and securities, in spot markets and in futures and all kinds of derivatives of all the above commodities and securities. To carry on business as brokers, sub brokers, market makers, arbitrageurs, investors and/or hedgers in agricultural products, metals including precious metals, precious stones, diamonds, petroleum and energy products and all other commodities and securities, in spot markets and in futures and all kinds of derivatives of all the above commodities and securities permitted under the laws of India. To become members and participate in trading, settlement and other activities of commodity exchange/s (including national multi - commodity exchange/s) facilitating, for itself or for clients, trades and clearing/settlement of trades in spots, in futures and in derivatives of all the above commodities permitted under the laws of India.

The interest free security deposit will be refunded to the TCM, when they express their intention to relinquish their membership rights after a cooling period of 6-12 months of surrendering the membership rights. The minimum lock in period for membership is three years and three months.

While taking membership of BSE the designated directors have executed undertaking to following effect "We hereby undertake that on name of corporate entity starting business in the Stock Exchange, Bombay, we shall cease to do any other business or render professional services in any other capacity or work as an employee".; In view of undertaking as above it is suggested that designated director on entitiy having membership of BSE does not assume responsibility as qualifying director in corporate entity seeking membership of NCDEX. However entity having membership of BSE can seek membership of NCDEX through subsidiary route.

Exposure will be permitted against base capital and collateral however a portion of the same will utilized for formation of Settlement Guarantee Fund

One can use the dish and other hardware with concurrence of NSE and service provider.

Currently, there is no provision to charge any fee.

No, the networth of the holding company is not taken into consideration for reckoning the networth of the entity applying for membership.

The existing stock broking company cannot apply in the same and need to form separate entity for seeking membership of NCDEX.

Forward Markets Commission has accorded in principle approval for the following national level multi commodity exchanges in the country apart from NCDEX National Board of Trade Multi Commodity Exchange of India National Commodity & Derivatives Exchange of India Ltd

An individual, partnership firm, Private limited company, public limited Company, co-operative societies are eligible to become members of NCDEX.

The certificate and statements need to be certified by a Qualified Chartered Accountant who has audited the same.

We are in dialogue with large scale players in commodity market for voluntary market making like in case of gold and silver major bullion importing banks have agreed fro market making. Similarly large commodity trading houses have agreed to do market making in commodities they are dealing in.

Yes. The participants can avail of the exemptions, if any entitled to them. The buyers will have to indicate their ability to give supporting documents / certificates / declarations prescribed under the respective State sales tax laws at the time of giving requests for taking delivery and will have to be submitted before the supplemental settlement day. Submission of incomplete or invalid declarations / certificates would amount to defaults on the part of the seller.

No. The member need not have a sales tax registration. However, if the member wants to undertake proprietary trading and take the delivery of the commodities, then he needs to have sales tax registration under the provisions of the relevant State sales tax law.

Those clients who trade with the intention of taking/giving delivery should have sales tax registration before settlement of the delivery based trades. Deliveries given by clients/participants who are not registered under the relevant State sales tax law or whose registration is not valid on the date of sale / delivery, will amount to defaults.

The client / participant are responsible to move the commodities from their warehouse into the warehouses designated by the Exchange. Such movement may be by way of stock transfers from place outside the State for which the client / participant will be responsible for issuance of certificate in Form F under the Central Sales Tax Act, 1956 to his dispatching branch. The client / participant will also be responsible for payment of octroi, entry tax, cess, etc. on entry of the goods into the local areas in the State where the designated warehouse is located and for obtaining check post declaration forms from the sales tax department. If the client / participant move the commodities from another State pursuant to a fructified sale transaction, there could be liability for payment of Central sales tax in the State from where the inter-State movement of the commodities commences. The client/participant will be responsible for the payment of the Central sales tax in such cases. The clients/participants are being advised to move the commodities into the designated warehouses well in advance and ensure compliance of provisions of law.

Yes, the client/participant will have to register in all those states where the delivery center for the commodities is located.

The amount will is reflected in the SL -01 for the buyer member and for the Seller member he has to export the data in excelsheet from Web NCFE module to view the details.

Sales tax registration is to be obtained in the State where the delivery center for the commodity is located.

Yes, inclusive of all taxes and levies means sales tax is added in the amount traded on the Exchange platform. Hence, to raise the sales invoice and to comply with local sales tax requirements member/client or appointed agent has to be registered with local sales tax authority.

At the time of supplemental settlement the buyers will have to confirm their eligibility for availing exemption from payment of sales tax. The party will have to physically deliver the support documents to their respective clearing members within 5 business days and the clearing members will forward the same to the relevant parties within the next two days thereafter.

AMC Certificate is a settlement related document which is to be provided by seller in the commodities which has delivery centers in Andhra Pradesh for e.g., Chilli, Turmeric, & Maize. Seller & Buyer both has to be registered with the Market Committee where the delivery takes place. Seller will provide AMC certificate to the corresponding buyer and the buyer will have to deposit the same with the market authorities and issue ] a fresh AMC certificate through a book provided to him by the market authorities and in case both buyer & seller are from same market place a seller will have to provide a declaration form to the buyer.

Anugya patra is a settlement related document which is to be provided by seller. Eg. In case of "Chana" at Indore. It is a document which proves that seller had paid "Mandi tax" at Indore Mandi. Mandi tax has to be paid to the Mandi authority when the seller deposits Chana for the first time. Depositor will get Anugya patra from Mandi authorities which are to be passed on to the corresponding buyer. In case, if both seller and the buyer are registered at same Mandi, the seller has to write Anugya patra. Number on the invoice which will be provided to the buyer.

Rates of sales tax for commodities differs from State to State. In the case of trades culminating into delivery, sales tax as per the delivery center/state will be payable. Many States as per the sales tax laws, also provide for levy of additional tax, turnover tax, resale tax, etc. which may or may not be recoverable from the buyer depending on the provisions of the local State sales tax law.

On the day of settlement the sales tax incidence on the trades settled would be notified to the clearing members, which will be settled on the supplemental settlement day, which is normally two (2) days after the actual settlement day.

t is obligatory on the part of the seller to collect the sales tax from the buyer and deposit the same into the Government Treasury. However, in the case of commodities which are liable to tax on purchases only and not on sales, the buyer will have to discharge the liability for payment of tax. In all other cases, payment of taxes will be the sole responsibility of the seller.

Get in touch with the relevant department of Govt. who will register and issue the service tax registration no. and certificate.

The Service Tax shall be paid in the specified branches of designated banks.

In case of delay in payment of service tax, interest @1.25% per month or part thereof should be paid which may vary and will have to be confirmed with the relevant department.

All the persons providing taxable services shall register with the Central Excise Department of the concerned jurisdiction (Local Area). The registration shall be for each premise where billing is done. Only one registration is needed even if the service is provided in more than one premise provided the bills are raised in one place. If bills are raised in different premises, the registration should be obtained separately for each such premise where billing is done.

Service Tax is payable on the amount actually received i.e. Total Amount received by the Member.

No specific mention is made in the Act. However, records like invoice copy and books of account which constitute sufficient evidence for calculation of service tax liability and payment of service tax shall be maintained.

Service Tax is a form of indirect tax imposed by the Government on specified services called 'taxable services'. Presently it covers 58 services (for detailed information the Member will have to Contact the local Services Tax Office).

12.5% on the value of taxable service (i.e.) gross amount received by the service tax provider (member) for the services rendered by Member to the Client.

No. Only one registration is required even if the service provider provides more than one taxable service.

The service tax shall be paid by the service provider (ie. the Member)

No. The buyer and the seller have to express their intention for delivery. Deliveries would be matched randomly at client level. Contracts not assigned delivery would be settled in cash

To start with, we are looking at only one delivery center for each commodity and only one warehouse in that location. Over a period of time, we would be adding warehouses to the list.

The exchange will specify, in its contract description, the particular grade / variety of a commodity that is being offered for trade. A range will be specified for all the properties and only those grades / varieties, which fall within the range, will be accepted for delivery. In case the properties fall within the range, but differ from the benchmark specifications, the Exchange will specify a premium / rebate

Any buyer intending to take physicals would have to put a request to its Depository Participant, who would pass on the same to the registrar and the warehouse. On a specified day, the buyer would go to the warehouse and pick up the physicals.

The seller intending to make delivery would have to take the commodities to the designated warehouse. These commodities would have to be assayed by the Exchange specified assayer. The commodities would have to meet the contract specifications with allowed variances. If the commodities meet the specifications, the warehouse would accept them. Warehouses would then ensure updating the receipt in the depository system giving a credit in the depositor's electronic account.

All open contracts not intended for delivery and non-deliverable positions at client level would be cash settled.

Any disputes in regard to the quality / quantity will be referred to the Arbitration committee set up for the purpose.

The buyer intending to take delivery would give declaration for re-sale at the time of giving intention for delivery. Accordingly the seller would issue the invoice, exclusive of sales tax. The declaration form duly signed by the buyer would be forwarded through the buyer's clearing member to the seller's clearing member within a specified time after pay-in and payout.

The seller would give the invoice to its clearing member, who would courier, the same to the buyer's clearing member.

For open positions on the expiry day of the contract, the buyer and the seller can give intentions for delivery. Deliveries would take place in electronic form. All other positions would be settled in cash.

NCDEX would prescribe the accreditation norms, comprising of financial and technical parameters, which would have to be met by the warehouses. NCDEX would take assayer's/Structural Engineer's certificate confirming the compliance of the technical norms by the warehouses.

NCDEX has tied-up with NCCL for clearing the trades

Prices quoted for the futures contracts would be basis warehouse and exclusive of sales tax applicable at the delivery center. For contracts materializing into deliveries, sales tax would be added to the settlement amount. The sales tax would be settled on the specified day after the payout.

Those commodities will not be available for delivery on the clearing corporation. Hence the deliverable electronic balance would be automatically reduced. Warehouse would place the commodities in a separate area, indicating that they are not available for electronic trading.

Partial delivery as well as bad delivery would be considered as default. Penalties would be levied.

All contracts settling in cash would be settled on the following day after the contract expiry date. All contracts materializing into deliveries would settle in a period of 2-7 days after the expiry. The exact settlement day would be specified for each commodity.

Rs.6/- per Rs100, 000/- i.e. 0.006% of the trade value.

In case of grains/seeds, warehouses would earmark a definite storage capacity within the warehouse premises for members of NCDEX, while in case of oils, specified tankers would be earmarked for NCDEX participants.

Settlement guarantee fund would be maintained and managed by NCDEX.

We are looking at following assayers: SGS India Pvt. Limited, Geo-Chem Laboratories, Dr. Amin Superintendents & Surveyors Pvt Ltd., Calib Brett and Stewart. Only certificates given by specified assayers by NCDEX will be accepted. All the certificates issued will have time validity

Following banks have agreed to act as clearing bankers: ; Canara Bank HDFC Bank ICICI Bank UTI Bank

We have approached Bank of Baroda Canara Bank Global Trust Bank HDFC Bank ICICI Bank IDBI Bank Indusind Bank UTI Bank

The warehouse concerned would decide the warehousing charges. However the warehouse charges would be made available on our website

Yes. The assayers and or other experts on behalf of NCDEX would carry out surprise health checks and inventory verification.

Yes. These would be pre-defined and made available on the website. The settlement obligation would be impacted on account of the premium / rebates in case of deliverable positions. The parameters which would be considered for premium / rebate computation as well as the methodology would be specified by NCDEX

No, He has to pay stamp duty in the state where the client is registered and is trading, irrespective` of the where the registered office of the member is located and contract notes are printed.

No, he has to pay in individual states depending on where his client is trading. E.g.: If the Client is trading in Mumbai, and the main office is based in Delhi from where the Contract Notes are printed, then Stamp duty is applicable according the Maharashtra Stamp Duty Act for the particular Client and is to be paid in the State of Maharashtra.

Stamp Duty is applicable on the Value of the Contract note and is calculated on the percentage specified by the stamp duty authority of the relevant state.

Yes, it is to be paid state wise as all state govt. has specified certain value of stamp duty to be paid for futures contracts.

Yes. As per Article 51 A of the amended Bombay Stamp Act, 1958, Members/Constituents in Maharashtra have been requested to pay stamp duty on all transactions in forward contracts in commodities at the rate of Re 1 per lack or part thereof. Please refer to our circular no. NCDEX/LEGAL- 005/2005/109 dated May 12, 2005 in this regard. As stamp duty is levied under State law and if there is a contention by a member that the stamp duty is not leviable, members may raise contention before the State stamp duty authorities.

He has to check with the relevant stamp duty authorities in the Stamp duty office of the relevant state.

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