HDFC Bank buys 2% in MCX

HDFC Bank, one of India's largest private sector banks, announced its strategic participation in the equity of Multi Commodity Exchange of India (MCX).

HDFC Bank is understood to have picked up a two per cent stake similar to Corporation Bank, Union Bank of India, Bank of India and Canara Bank.

Other key shareholders in MCX include State Bank of India, State Bank of Indore, State Bank of Hyderabad, State Bank of Saurashtra, SBI Life Insurance Co. Ltd, Bank of Baroda and Financial Technologies (India) Ltd.

Jignesh Shah, managing director of MCX, said MCX feels the entry of HDFC Bank will bring substantial thrust to the Indian commodities and agriculture markets.

Participation from HDFC Bank will give a fillip to efforts to create greater opportunities and further fortify the commodity futures market.

"The strengths of HDFC Bank, coupled with MCX's knowledge, foresight, innovations and technology will definitely result in a win-win situation," Shah added.

He indicated this would spur structural development of commodities markets and boost volumes on the exchanges.

P V Ananthakrishnan, vice-president of the commodities and agri-business group of HDFC Bank, said, "As part of the bank's objective of contributing to the development of infrastructure in its line of businesses, HDFC Bank is keen to participate in the building and upgradation of infrastructure in the commodities exchange and related business by making an investment in the equity capital of MCX".

The bank is confident that institutional support extended towards building infrastructure will help the many segments associated with the commodities business, including farmers, in the days to come, he added.

The MCX-HDFC Bank alliance will link the bank's 444 branches in 202 Indian cities to the 4000-plus terminals that MCX currently operates in around 400 cities.

This will create a platform that will enable MCX and HDFC Bank to cross-sell products and services to users and also help MCX to reach out to a wider group of prospective participants in the commodities market.