Business Daily from THE HINDU group of publications
Sunday, Nov 25, 2007
ePaper | Mobile/PDA Version
Business Daily from THE HINDU group of publications Sunday, Nov 25, 2007 ePaper | Mobile/PDA Version |
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Money & Banking
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Credit Market Agri-Biz & Commodities - Commodity Exchanges
“It (lending to farmers) is risk-free as they are lending against a security whose quality is assessed.” K.V. Kurmanath Hyderabad, Nov. 24 State Bank of India, IndusInd Bank and HDFC Bank have evinced interest in lending to farmers through aggregators to participate in futures market. The regulator, Forward Markets Commission (FMC) has begun talking to the banks to support the idea of forming aggregators to let farmers pool in tradable volumes of commodities. “This will help farmersenjoy the benefits of trading in futures, according to Mr B.C. Khatua, Chairman of FMC. Addressing a press conference on Saturday, he said the Federal Bank had already begun financing farmers in Kerala. Mr Khatua was in Hyderabad for a workshop on commodities futures organised by University of Hyderabad for academicians, researchers and industry. The Commission and Exchanges had proposed promoting aggregators in the form of State Marketing Federations, NGOs and farmers’ associations to pool farmers for trading on the commodities exchanges. Even small farmers could benefit if they tag on to the aggregators. “But the farmers need credit soon. The banks could step in here,” he said. According to Mr Khatua, “It (lending to farmers) is risk-free as they are lending against a security whose quality is assessed.” RegulationsStating that commodities trading had come of age in India, with a volume of Rs 37 lakh crore last year, he, however, said transparency and well-laid regulations would infuse confidence in the markets. “This will check against undue influence of market operators,” he said. An interim report of IIM-Bangalore on the impact of exchanges on commodities prices found there was no conclusive correlation between the two. Display boardsAfter testing a pilot in Gujarat, FMC will put up electronic display boards at all the 7,500 market yards, informing farmers on spot and future contract positions. The display boards will come up in 2,500 yards within the next 16 months. More Stories on : Credit Market | Commodity Exchanges | Farm credit | State Bank of India
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