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CCIL to begin operations by August 2001

NetScribes / Radha Ganesan

The Clearing Corporation of India Ltd, being set up to facilitate and settle transactions in the debt and forex markets, is expected to begin operations within two months. The corporation, incorporated in May 2001, is currently finalising technology systems, premises and recruitment.

The corporation is also seeking further infusion of capital and will shortly invite responses from various market intermediaries, including primary dealers, banks and financial institutions. The proposed equity capital is to the tune of Rs 500 million.

The setting up of CCIL was proposed in Union Budget 2001-02 and the finance ministry had fixed a June 2001 deadline for the same.

Former National Stock Exchange managing director RH Patil will head the corporation, while M Ramesh, formerly with Discount and Finance House of India, has been appointed managing director. "The corporation would be set up by June-end. But we can begin operations only when the negotiated dealing system being set up by the Reserve Bank is in place," Patil told NetScribes.

Debt market trades and transactions would be routed through the NDS and then settled at CCIL. "We expect the NDS to be in place by July 2001, after which we can begin our operations," he said.

The corporation received the certificate to commence business on May 15, 2001 and has so far raised 51 per cent of the proposed equity capital. State Bank of India holds 26 per cent in CCIL, while Bank of Baroda, HDFC Bank, ICICI Ltd, IDBI and LIC hold 5 per cent each.

"We are looking at a second group of stake holders. Soon, we will issue letters to primary dealers, banks and financial institutions. We will then shortlist players from each of the segments and work up to a number less than 50," Patil said.

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