Where people come first
National Commodity & Derivatives Exchange Limited (NCDEX), the largest Agri Commodity Derivatives Exchange, has incorporated an institution and a market intermediary, National E-Repository Limited (NERL) that provides a platform for issuing negotiable warehouse receipts for commodities in electronic form. NERL, the Commodity Repository in India, incorporated in February 2017 and has received the ‘Letter of Intent (LoI) in December 2016 from WDRA. NERL commenced its operations in September 2017.
Although India had a vibrant commodity market which is more than a century old, the paper-based warehouse reciepts caused substantial problems like bad delivery, mutilation, duplication etc. The enactment of Warehousing (Development and Regulation) Act, 2007 and thereafter the formulation of The Warehousing Development and Regulatory Authority (WDRA) in October 2010 was done to exercise the powers conferred on and to perform the functions assigned to it under the Act, for development and regulation of warehouses, negotiability of warehouse receipts and promote orderly growth of warehousing business.
WDRA in October 2016 came out with Guidelines for Creation and Management of Electronic Negotiable Warehouse Receipts (ENWRs), the enabling provisions of the Guidelines seek to establish a system for creation and management of ENWRs through registered Repositories, paving the way for establishment of NERL.
Doing away with paperwork
In the Repository system, ENWRs are held in repository accounts, which is more or less similar to holding funds in bank accounts. Transfer of ownership of ENWRs is done through simple repository account transfers. This method does away with all the risks and hassles normally associated with paperwork. Consequently, the cost of transacting in a repository environment is considerably lower as compared to transacting in physical warehouse receipts.
“Where people come first
Using innovative and flexible technology systems, NERL works to support farmers, traders, processors and all value chain participants in the commodity markets. The intention is to make the business through warehouse receipts effortless for all our stakeholders and bring ease, safety and value to electronic warehouse receipts. In the end, we are not just about eNWR, but also about the people who use them.