Financial Daily from THE HINDU group of publications
Tuesday, Oct 11, 2005
Financial Daily from THE HINDU group of publications Tuesday, Oct 11, 2005 |
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Money & Banking
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Credit Market Agri-Biz & Commodities - Commodity Exchanges Lending against commodities — Indian Bank ties up with NCMSL Our Bureau
Mr A. Hariprasad (left), Managing Director and CEO, National Collateral Management Services Ltd, and Mr K.C. Chakrabarty, CMD, Indian Bank, at the signing of a MoU in Chennai on Monday. - - Bijoy Ghosh
Chennai , Oct. 10 INDIAN Bank expects to generate Rs 150 crore to Rs 200 crore of loan assets by lending against commodities — an activity that the bank has started recently. A key issue in lending with commodities as security is the assessment of the security itself — quantity, quality, price — and protecting it against damage. To take care of "collateral management," a new company has come up — National Collateral Management Services Ltd (NCMSL). Indian Bank on Monday entered into an agreement with this company. The bank's Chairman and Managing Director, Dr K.C. Chakrabarty, told newspersons on Monday that he expected commodity-related loan sanctions of between Rs 150 crore and Rs 200 crore, which includes loans for building warehouses. Promoted by banks, National Commodity and Derivative Exchange, Iffco, Nafed and Audit Control and Expertise (ACE) Geneva, NCMSL works toward the objective of creating a safe and liquid warehouse receipts market in the country. The Managing Director and CEO of NCMSL, Mr A. Hari Prasad, told newspersons that the company would hire warehouse space, which is available aplenty across the country. He said the company's services would help farmers, who could warehouse their produce, take a `warehouse receipt' from NCMSL and get finance from banks on the basis of the warehouse receipts. Banks, knowing that NCMSL is there to take care of the collateral, would be more comfortable to lend to the farmers. NCMSL has a paid-up capital of Rs 15 crore.
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