Banking on Commodity Derivatives Trading: A Risky Proposition
On 10th December 2012, India’s Finance Minister P Chidambaram added a new clause in the Banking Laws (Amendment) Bill 2011 which was not part of the original amendments vetted by the Parliamentary Standing Committee on Finance last year. The new clause allowed the entry of banks in commodity futures trading in India. It also allowed mutual funds, insurance companies and institutional investors to trade in Indian commodity futures markets.
Due to strong opposition by several political parties on the grounds of violation of Parliamentary procedure, the government was forced to drop this clause from the…