RBI may announce ceiling on banks’ exposure to commodity futures

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SummaryThe Reserve Bank of India is likely to announce a ceiling on banks' exposure to commodity futures, after the government allowed them to trade in this segment by amending the banking regulation law.


Indian banks also may also look at developing the requisite expertise and resources in the business before taking the plunge. Currently, they have some experience in commodities trade, especially in importing and selling pf gold with permission from RBI. Besides, they are also closely involved with farmers due to their lending to the farmers as agriculture is a priority sector. Though most farmers do not indulge in commodities trading, banks are hopeful of developing products for them in the future.

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