Replying to a calling attention debate in the Rajya Sabha on the issue, Finance Minister Yashwant Sinha also gave a clean chit to the Sebi chairman DR Mehta saying, "he is above board."

The Opposition, however, contested Mr Sinha's clean chit to the Sebi chief as the enquiry is not yet over. Almost all the entire Opposition, cutting across party lines, opposed the ongoing Sebi enquiry and demanded a JPC probe. They alleged that regulator has to do a lot of explaining itself and, therefore, it cannot be entrusted with an enquiry into the matter.

The Finance Minister, in course of his reply, said the market watch dog is likely to complete its interim report by the mid-April, and that the government can think of any other course of action only after receiving the report.

Stressing that there is no payment crisis on the bourses, Mr Sinha said the exchanges have enough trade guarantee funds to take care of such situations.

Mr Sinha also told the Members that the banks have stayed within their prudential norms while funding brokers, and pointed out that banks' exposure is less than 2 per cent of their total lending as against the maximum exposure limit of 5 per cent. Responding to the Members' concern about the Global Trust Bank merging with UTI bank, Mr Sinha said, the merger is yet to take place. He said RBI is looking into the whole merger issue and he is sure the apex bank will consider the entire aspect before taking a decision.

Justifying the Sebi enquiry, the Finance Minister said the market regulator is a quasi-judicial authority and he has no doubt that it will do its job competently. He maintained that Sebi has done a lot of improvement in the functioning of the bourses having taken a number of steps in this direction.

Initiating the debate, leader of the Opposition in the Rajya Sabha and former finance minister Dr Manmohan Singh charged the government with apathy towards market manipulation and asserted that market reforms should be credible. Stressing that all is now well with the market, Dr Singh said, the recent happenings proved that the government has failed to protect the interests of investors. He said the malaise is deeper than it looks on the surface, adding broker-driven exchanges are doing a greatest disservice to the investor community.

He charged Sebi with blocking the rolling settlement mechanism on the plea that the feel-good factor in the capital market will be disturbed. He said, such a plea is only specious.

Alleging that bank funds are being made available to brokers who are merely playing into the market to bolster their own interests, Dr Singh sought to know how brokers, already facing accusations and charges, are allowed to manipulate the market. Among the Members who participated in the debate included Nilotpal Basu (CPM), Prem Gupta (RJD), Kapil Sibal (Cong), Amar Singh (SP) and SS Ahluwalia (BJP).