To address the concerns of stakeholders on tea auctions, the Tea Board has decided to halt for four weeks the new settlement process introduced after pan-India electronic auctions.
That is, till the technical issues at stake are addressed, the earlier payment procedures in place before introduction of pan-India operations in various centres will be followed. The Board has formed a committee and asked NSE.IT, the IT department of NSE which provided the software, and the banks concerned to resolve the issues.
The Board introduced pan-India e-auction in June at all seven auction centres. It selected Bank of India (BoI) as the settlement bank. NSE.IT, software developer of the e-auction platform, developed the post-auction settlement module and has been operating the system.
Till then, State Bank of India (SBI) and IndusInd Bank had been handling the payment settlement processes, in the old e-auction process which was centre-specific.
Since the new system is held to be creating a problem, the Board decided to put the new settlement system on hold for four weeks. For this period, settlement will continue with SBI and IndusInd Bank payment processes, depending upon the centres.
The decision was taken by the Board after a day-long meeting with various stakeholders who’ve raised concerns over the post-sale operations.
While the tea in the auctions is sold in the garden’s name, the payment is made in the name of the tea company. However, during the switchover of the settlement bank from SBI to BoI, several technical snags developed, preventing money from buyers to be transferred to the sellers’ account.
“We have identified the problem and the technical glitches are being worked upon,” said Board chairman Santosh Sarangi. Pan-India auctions would continue, he stressed; the settlement process was reverting to the earlier system for the time being — the settlement for sales on or from this Tuesday will be done as was the case prior to September 12. Payment instruction details have been issued for the period of switch.
NSE.IT will also revise the structure of the Management Information System (MIS) to process the payment. And, correct the source information feed required to correctly catalogue the tea and generate sale by sale reports. The Board has formed a committee comprising various stakeholders; they’ll work upon the new MIS format.
During the time, the post-sale module remains suspended, brokers said an estimated 15 million kg each week would go under the hammer.