Main objectives of WDRA & its Repository is to implement the electronic Negotiable Warehouse Receipt System in the country, improve the fiduciary trust of the depositors and the 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. To provide impetus for increasing the use of eNWRs, WDRA is focusing on developing commodity settlement mechanism and dispute resolution mechanism; registration of warehouses in order to achieve the objectives laid out in the WDR Act.
Repository will facilitate pledging of electronic Negotiable Warehouse Receipts, and the release of such pledges, via the Repository.
Pledging is a process in which holder of the eNWR will get a loan from the financial institution using the underlying commodity of eNWR as collateral. When a pledge is marked, the eNWR balances will remain in the client’s account (borrower) only but the control on the balance will be with the financial institution. In other words, the client will not be able to use the eNWR balances until the pledge in favour of the financial institution is active. Further, if the client has repaid the loan, the financial institution will release the pledge and upon such release, the balances of eNWR will be available in client’s account for his use. However, if the client does not repay the loan or defaults the repayment, the financial institution will have absolute right to get the eNWR balances (ownership of eNWRs) transferred to financial institution’s account
A bank, or financial institution licensed under the Banking Regulation Act, 1949 and the Reserve Bank of India Act, 1934;