IDBI Bank has bought 10 percent stake in Universal Commodity Exchange (UCX), which is yet to start operations, for 100 million rupees, the Economic Times newspaper reported.
The commodity exchange is promoted by IT People, a company that provides software solutions to capital and commodity markets.
“The idea behind acquiring equity is to push agricultural loan through this venture,” said the bank’s Chairman and Managing Director R.M. Malla, confirming the development to the newspaper.
Moreover, IDBI will be the only bank among promoters and therefore all transactions of the exchange will be routed through IDBI, he said.
UCX officials were not immediately available for a comment for this report.
According to norms, a commodity exchange needs to have a minimum equity capital of 1 billion rupees.
IT People, promoted by Ketan Sheth, has to reduce its stake in the exchange to 26 percent from the present 40 percent within five years of its operations.
The commodity exchange had received an in-principle approval from the Forward Markets Commission (FMC), the commodity markets regulator, in August last year.
Universal Commodity Exchange’s CEO Resigns
Universal Commodity Exchange’s Chief Executive Samir Shah resigned on July 5, citing personal reasons, about a month after he joined the company.
“I am going for personal reasons. I am going back to Singapore, it didn’t work for me…,” Shah told Reuters.
Shah is in the process of informing the Forward Markets Regulator (FMC), the commodity markets regulator, he said. UCX officials could not be immediately reached for a comment.
India, the biggest buyer of bullion and the second-largest wheat and rice growing nation, has 21 commodity bourses, including five operating at the national level.