India's leading agri commodities bourse - the National Commodity and Derivative Exchange - has asked the government to permit banks to hedge at domestic commodity exchanges like international bourses.
NCDEX managing director P H Ravikumar said that the commodity exchanges in India also favour introduction of option contracts.
Recently, the apex Reserve Bank of India had allowed hedging in certain items on global commodity exchanges.
Welcoming the RBI decision, Ravikumar said if banks are allowed to facilitate hedging at international exchanges, they should also be allowed to permit hedging at domestic exchanges.
"The choice of hedging at global commodity exchange or domestic bourses should be given to corporate houses," he said.
He pointed out that the move would result in diversion of hedging operations from domestic to international exchanges.
He said NCDEX wants introduction of options contracts on domestic commodity exchanges.
"If government has the need for such contract, industry like flour millers has also the need," he said.
Leading Indian commodity bourses have been demanding that FIIs, banks and mutual funds should be allowed to trade at commodity exchanges.
