Financial Daily from THE HINDU group of publications
Tuesday, Jan 08, 2002
Financial Daily from THE HINDU group of publications Tuesday, Jan 08, 2002 |
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Agri-Biz & Commodities
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Commodity Exchanges Money & Banking - Public Sector Banks Nabard, BoB may lend equity support to commodity exchange Jayanta Mallick
KOLKATA, Jan. 7 THE National Bank for Agriculture and Rural Development (Nabard) and the Bank of Baroda (BoB) are likely to lend equity support to the Commodity Exchange of India (CEI) as co-promoters. Mr Kailash Gupta, one of the promoter directors of CEI, told Business Line in telephonic interview from Ahmedabad that negotiations were on for equity participation from Nabard and BoB. The country's first experiment in establishing a demutualised futures exchange in commodities, CEI has a target capital base of Rs 10 crore. The two proposed equity partners are to bring in a combined capital of Rs 2.50 crore. Nafed, Central Warehousing Corporation, Gujarat Agro Industries Corporation, Gujarat Agri Marketing Board and Neptune Overseas (a private company) have already agreed to put in around 75 per cent of the total capital. CEI, which is in its formative stage, currently has five directors on its board representing five promoters. Eventually, it may have an 8-member board. The exchange is expected to begin online trading in futures contracts for 21 oils and oilseeds within six months. The Forward Markets Commission has granted in-principle permission to the exchange in oil and oilseed items. The exchange proposes to establish a system of settlement through warehouse receipts according to the accepted international practice. ``It will have an independent clearing house. The exchange will be housed in around 10,000 sq ft area,'' Mr Gupta said. In the initial stage, the exchange plans to connect about 200 Ahmedabad members through LAN. Suitable connectivity and hardware configuration will in place for around 500 members outside Ahmedabd. The exchange has drafted an eligibility criteria for membership as also capital adequacy norms. ``Previous track record will be one among several screening pointers memberships.''
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