Payment system risky: Tea industry
A few months into the operation of the pan-India tea auction system, payment problems are creating serious roadblocks and have also increased the “risk in the auction system”, an industry body has said.
Under-prepared
The Federation of All India Tea Traders Association (FAITTA) — the apex body of Tea Traders and Tea Traders’ Associations —said that all segments of the tea industry, including producers/sellers, buyers, brokers, tea auction organisers and warehouses, have been impacted by an under-prepared roll-out of the settlement module.
All the issues pertaining to the system should have been comprehensively resolved prior to launching the settlement and payments issued cannot be settled on an ongoing basis, without compromising the security of tea deliveries from warehouses according to the FAITTA.
“Digital orders (DOs) which are negotiable instruments for delivery of tea worth several crores of rupees are being issued with digital signatures, without proper infrastructure for authenticity verification by warehouses, increasing the risk in the auction system,” the ITA said.
Industry sources said that these issues had been catalogued periodically but had not been addressed. They are now affecting cash-flow.
Source: The Hindu
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