Mumbai: India’s state-run IDBI Bank has bought 10% stake in Universal Commodity Exchange (UCX), which is yet to start operations, for Rs100 million ($2.25 million), 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 government norms, a commodity exchange needs to have a minimum equity capital of Rs100 crore.
IT People, promoted by Ketan Sheth, has to reduce its stake in the exchange to 26% from the present 40% 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.