Mumbai: Assurances about well laid contingency plans by the regulators RBI and the Securities and Exchange Board of India are helping to shore up confidence in the markets on Friday as votes will be counted and results of the Lok Sabha elections are announced.
RBI governor Raghuram Rajan told reporters after an RBI board meeting in Simla on Thursday that they had assured the board that they were in discussions with the finance ministry and Sebi.
”We have placed prudential contingency plans to infuse liquidity, if needed. We hope that everything will go normally tomorrow when the election results are announced,” he said. Speaking in Mumbai at an Assocham meeting Sebi chief U.K.Sinha said: “We are ready for any unusual movement in the market. We are ready with the guidelines as to what action to take in what situation.”
Asked during the interaction with members about the possible risks to the market because of exuberance in the run-up to the election results and in the possible scenario of the results not going on the expected lines, Mr Sinha said, “Exchanges are looking into as to what are the clients’ collateral positions, the brokers’ collateral positions. We are conducting a daily stress test and we are more than satisfied that our risk management systems. He said “I want to assure the people of the country that we are ready to deal with any situation and we will not allow anyone with intention to create any irregularities in the market to succeed.”
The regulators are taking utmost care following their experiences in the two earlier elections where pollsters went wrong and the markets collap-sed. Pollsters on both occ-asions had predicted a BJP win but the Congress w.on leading to huge selling in the markets. This time too the exit polls are predicting a near sweep for the Modi-led BJP which led to the markets rising over a thousand points in three days.
