Centre Rejects Bank, MF Participation In Comexes

New Delhi: Amid worries that trading in commodity exchanges increases prices of essential items, the government has rejected the possibility of permitting banks and mutual funds to trade in commodity futures in the near future. Institutional investment via mutual funds or banks would create more trouble for the exchanges. The increase in prices of essential items had raised worries within the government, so much so that futures trading in wheat, rice and a few pulses were banned early this year. The government had also establish a committee under Planning Commission Member Abhijit Sen to study the impact of futures trading on prices of farm goods. The government was of the view that exchanges should manage their current trade more efficiently before demanding participation of mutual funds and banks.