Uco Bank to foray into derivatives market

Mumbai, March 23 | Updated: Mar 24 2006, 05:30am hrs
Kolkata-based Uco Bank, on Thursday, said it would foray into the derivatives business to augment its fee-based income and to hedge the risk.

We are planning to enter into the derivatives market, Uco Bank chairman and managing director, V sreedhar, said.

Asked whether the bank has finalised consultants for the proposed venture, he said it was yet to take a decision on this front.

However, sources said, the bank has already finalised one consultant, which has initiated discussions with the public sector bank to prepare the roadmap for its proposed venture.

The consultant will provide the final blueprint to thebank in three months time. Subsequently, it will foray into the sector, the sources said.

Uco Bank floated a tender a few months back for the appointment of a consultant for venturing into the derivatives market.

In addition to increase their fee-based income, public sector banks in the country find derivatives and appropriate route to hedge the investment portfolio for minimising the risk factor and market volatility.

Though derivatives trading commenced in India in June 2000, the market is yet to graduate.

Reserve Bank of India (RBI) permits commercial banks to enter into derivatives trading.