Federal Bank launches future trade in agriculture commodities

Kochi, Aug 16 (UNI) Kerala-based Federal Bank has formulated a new scheme for financing delivery-based futures trade in agricultural commodities.

The scheme, which would be launched tomorrow by Forward Markets Commission Chairman B C Khatua, would enable customers to avail loans up to 85 per cent of the futures selling price.

Besides, the Bank would also fund both the initial margin and the daily Mark-to-Market (MTM). As the Bank was into MTM funding, the client need not worry about the price fluctuations, and on the settlement date the surplus amount after adjusting the loan would be credited to the customer's account.

The scheme would be highly beneficial to the farmers, who require funds and at the same time want to sell in Futures Market to get the benefit of a higher price.

In order to have smooth payment of margins and daily MTM to the Commodity Exchanges, and for hassle-free receipt of daily MTM and settlement, the Bank had taken the Professional Clearing Membership (PCM) of the three major commodity exchanges, namely NCDEX, NMCE and MCX.

UNI