Financial Daily from THE HINDU group of publications
Saturday, Apr 20, 2002
Intrex mulls trade platforms abroad
KOLKATA, April 19
INTREX India Ltd, the country's first cashless trade exchange, and member of the Essel group, is planning to set up trade exchanges abroad. Mr Ashok Goel, Managing Director of Intrex, told presspersons here that the company was currently weighing the possibility of opening trade exchanges in Asian countries.
"We have not yet decided on the locations, but South-East Asia and West Asia could be among the probable sites. By the end of the current financial year, Intrex is likely to establish its first overseas trade platform," Mr Goel said. However, the overseas platforms would not be an extension of the Indian outfit and would be governed by the local trade and foreign exchange regulations.
The forex rules in India do not currently permit free cross-border trades. "We have made presentations to the Rerserve Bank of India. The current convertibility status of rupee is not conducive to cross-border trades, which Intrex wants its members to carry out on its platform," he said
Mr Vivek Debroy, Director, said that there were other issues such as clearance from DGFT and tax implications on the trades that need to get more liberal to facilitate counter-trade.
A separate group outfit was likely to handle the overseas trade platforms, Mr Debroy indicated. The Essel group is also considering a public float of Intrex India and listing on stock exchanges. "The time and quantum of such an issue have not yet been decided," Mr Goel pointed out.
Till March 31, 2002, Intrex India had attracted 505 members for its cashless trading system. The members' list include corporates such as Godrej & Boyce, Electrolux, Videocon, Reebok, Birla 3M, Air Sahara, Birla Electricals, 20th Century Fox and Zee Telefilms.
During the current fiscal, Intrex India intends to raise the membership to 2000. It recently set up its eastern trading hub here.
A member conducts trade based on "trade credit'' provided by Intrex. Depending on the credit-worthiness of the member-company or firm, the payment is made through an escrow account on behalf of the buying member. A member can both buy and sell the same item or different items through the exchange.
"Cashless trading is a new concept in the country, but catching up fast among big corporates and SMEs," Mr Goel added.
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