Government launches Electronic Negotiable Warehouse Receipt System

The Ministry of Consumer Affairs, Food and Public Distribution launched web portal of Warehousing Development and Regulatory Authority (WDRA) & Electronic Negotiable Warehouse Receipt (e-NWR) System under Digital India mission.
These initiatives aims at simplifying Warehouse Registration Rules, digitizing entire process of registration, monitoring and surveillance as well as creation and management of NWRs in electronic form through two repositories.

Negotiable warehouse receipts

NWRs are documents issued by warehouses to depositors against commodities deposited in warehouses for which warehouse is bailee. They are transferred by endorsement and delivery i.e. either original depositor or holder in due course (transferee) can claim commodities from warehouse.
NWRs can be traded, sold, swapped and used as collateral to support borrowing or loans from banks. These receipts were made negotiable under Warehouse (Development and Regulation) Act, 2007 and are regulated by Warehousing Development and Regulatory Authority (WDRA).

Key Facts

e-NWR will have no chances of any tempering, mutilation, fudging, loss or damage and also no possibility of any multiple financing. Hence, it will not only facilitate an easy pledge financing by banks and other financial institutions but also smooth trading on various trading centres like commodity exchanges, electronic National Agriculture Markets (e-NAM) and other electronic platforms. e-NWR will also help to save expenditure in logistics as stocks could be traded through multiple buyers without physical movement and can be even split for partial transfer or withdrawal.

Comment

These initiatives will revolutionise marketing of agricultural commodities and help farmers realize better price for their produce which will be step towards doubling farmers’ income by 2022. The whole purpose of simplifying processes and moving towards online system will enhance WDRA’s regulatory functions and bring greater fiduciary trust among banks, depositors and trade on e-NWR system.

Month: Current Affairs - September, 2017