IDBI Bank buys 10% in UCX; CEO of new commodity bourse quits
06 Jul 2011
IDBI Bank has apparently bought a 10-per cent stake in the upcoming Universal Commodity Exchange for Rs1 crore. The development comes on the heels of the resignation of the recently-appointed chief executive of UCX, Samir Shah, on Tuesday.
R M Malla, chairman and managing director of IDBI Bank, confirmed to The Economic Times that the bank had picked up a 10-per cent stake in what will become the country's sixth commodity futures exchange.
The exchange is promoted by IT People, a Ketan Sheth-promoted company that provides software solutions to capital and commodity markets, mainly in the Middle East and Africa. Indian Farmers Fertiliser Cooperative (IFFCO) is Sheth's major partner with a 15 per cent stake. UCX is yet to start operations.
"The idea behind acquiring equity is to push agricultural loans through this venture," Malla told the newspaper. IDBI will be the only bank among the UCX promoters and so all transactions of the exchange will be routed through IDBI, he said.
IDBI Bank is a promoter of India's leading bourse, the National Stock Exchange.
According to Securities & Exchange Board of India (SEBI norms), a commodity exchange needs to have a minimum equity capital of Rs100 crore. IT People must reduce its stake in the exchange to 26 per cent from the present 40 per cent within five years of its operations.
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