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May 16, 2002 | 0735 IST
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Scam not to affect gilts trade, says Sinha

Subhomoy Bhattacharjee

Finance Minister Yashwant Sinha said the confidence of the people in the gilts market would not be affected because of the current co-operative banks' scam involving trading of government securities.

Speaking to Business Standard in New Delhi, the finance minister said the scam was because of some unscrupulous people and there was nothing wrong per se in the way the market for government securities worked.

Sinha said the Reserve Bank of India was looking into the operations of the co-operative sector and, at this stage, the finance ministry was not required to interfere. There should be no cause for worry among the public on this score, Sinha added.

Meanwhile, according to Parliament sources, a calling attention motion on the co-operative banks' scam will be moved in the Rajya Sabha later on Thursday.

The finance minister will reply to the motion where he might elucidate on the steps being taken by the different regulatory agencies like the RBI, the Securities and Exchange Board of India and the National Bank for Agricultural and Rural Development.

The motion has been moved in the Upper House because the Lok Sabha has a packed two days before it adjourns on Friday.

In a related development, the Delhi office of the RBI has called a meeting of over 30 urban co-operative banks in the region to present their position on the scam.

However, RBI sources said there was no report from any of these co-operative banks of having fallen into trouble on account of dealing in government securities.

Such meetings between the RBI and the co-operative banks are an annual affair. However, because of the scam fallout the apex bank has asked each region to take stock of the position.

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