Union finance minister Pranab Mukherjee on Saturday said the government had no intention to reduce the power of the Securities & Exchange Board of India (Sebi) through formation of the proposed Financial Stability & Development Council (FSDC).

Mukherjee had proposed the formation of FSDC in his Budget speech. FSDC is supposed to be an apex body among various regulators for speedy action in times of financial crisis. ?We need more transparency in the capital market to reduce systemic risk while we need to encourage more financial products on exchanges for trading,? Mukherjee said.

Sebi chairman CB Bhave said the market regulator has asked capital market brokers to come out with a code of ethics within a year. The brokers? association, he said, should come out with a sort of document, which would have the details of the code of ethics. ?It should define what constitutes mis-selling of financial products,? he added. Brokers have a tendency to force their clients to go for margin trading and derivatives without explaining the impact of such trading. Such tendencies should be discouraged, he said. ??We receive complaints from investors about them getting highly leveraged and we believe many of them don?t fully understand what leveraging means,?? Bhave said.

In a move to bring in more transparency in the capital market transactions, Sebi had earlier proposed a client-broker agreement, listing terms and conditions relating to order and trade confirmation, contract notes, brokerage, settlement schedules, margin payments and dispute resolution.

Both Mukherjee and Bhave were present at a session organised by the Association of National Exchange Members of India. Mukherjee said the country would witness GDP growth of 8.5% in 2010-11. ?It is estimated that the economy this year would grow between 8.25% and 8.75%, but I think it would be a mean figure of 8.5%,? he said.

Asked whether the Centre would need to increase its borrowing to implement the Food Security Bill, which has proposed to issue food coupons, Mukherjee said the issue required to be looked into. He said the challenge before the finance ministry was to manage the economic recovery, which entailed a policy reversal.

Corp Bank to raise Rs 2,000 cr

State-run Corporation Bank is planning to raise Rs 2,000 crore in 2010-11 through a possible rights issue, bringing down the government stake in the bank by a maximum of 6%, the bank?s chairman & managing director JM Garg said.

The Mangalore-based bank had earlier said that it plans to raise Rs 6,000-crore over the next three years to meet its capital requirements. The government has 57.17% stake in the bank, which could eventually come down to 51%.

?We may come out with the rights issue next fiscal. We may also look at the option of a follow-on issue. All depends on the market condition then,? said Garg. ?We have not yet spoken to the government but they are open to the proposal of rights issue. They may even participate in that,? he added.

?We have plans to raise Rs 2,000 crore through equity this fiscal,? he added. Talking to reporters after the inaugural ceremony of 250 branches of the bank, Garg said, ?We have more than 4,500 crore of headroom available in tier-II.? The bank?s capital adequacy ratio at present is a little over 15%. The bank, with a networth of around Rs 5,500 crore, is looking at increasing the amount to Rs 10,000 crore in the next two years. Talking about the performance of the bank in the last quarter, he said, ?The fourth quarter was good. We were growing at 26%, but during the last quarter we have grown at around 32%.? The bank has seen good growth in SME, corporate lending and agricultural lending. Going forward, Corporation Bank is also planning to open branches in Hong Kong, Bahrain, Dubai and Singapore.