The National Commodities and Derivatives Exchange, which is promoted by the ICICI Bank-led National Stock Exchange consortium, will introduce cash and derivatives trading in bullion by June.
The NCDEX would finalise the details of the contracts to be introduced in the first phase and submit it to the Forward Markets Commission for approval within a month, P H Ravikumar, senior general manager, ICICI Bank, said. Ravikumar is heading the NCDEX project.
All the 75 commodities that are eligible for derivatives trading will be traded by the end of December 2003.
NCDEX will first introduce trading in cash and immediately follow it up with futures trading. Later, it plans to introduce a gold index and trading in the index.
"We will have similar indices for different commodities and will introduce trading in these indices at a later stage," Ravikumar said.
"We will also have indices for a basket of commodities and trading in them will be similar to the sensex or the Nifty," he added.
The consortium, which includes the Life Insurance Corporation of India and the National Bank for Agriculture and Rural Development, will invest Rs 80 crore (Rs 800 million) to start NCDEX.
ICICI Bank has also approached the Centre for an amendment to the Banking Regulation Act to allow banks to operate as market makers in commodities.
"We are looking at the possibility of introducing market makers in the exchange to provide depth to trading," Ravikumar said.
NCDEX will use NSE's nationwide network as a platform for trading.
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