ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

Articles By Madhoo Pavaskar

Options Trading in Commodities

From the Shroff Committee in the early 1950s to the World Bank-UNCTAD team in the late 1990s, the introduction of options trading in commodities has been opposed. The Kabra Committee was the lone exception in this regard but it offered no line of reasoning for its recommendations. An amendment to the Forward Contracts Regulation Act to remove the ban on options is already on the cards. With widespread unlawful options in commodities, there seems no earthly reason to continue the ban on them any more.

Warehouse Financing: Short on Logic and Long on Imagination

The attempt by the RBI to promote warehouse financing for agricultural commodities is undoubtedly a welcome move. The major problem, however, is that the country lacks modern warehouses. It would have been much better if the RBI-constituted Working Group on Warehouse Receipts and Commodity Futures had drawn up a road map to develop the warehouse receipt system for bank financing against agricultural commodities.