BANGALORE, July 24: The coffee futures contract panel has decided to constitute a company with an initial corpus of Rs1 crore. According to convenor of the panel Ashwin J Shah, a formal announcement to this effect will be made on Saturday at Chikmagalur. He also added that this was the first step towards setting up of a domestic futures exchange akin to the one prevailing at London. ``The paid up capital will be hiked to Rs 5 crore at a later stage. The required amount will be raised by way of token contributions from members. We expect each panel member to chip in at least Rs 1 lakh initially,'' added Shah.

The panel expects to raise the remaining amount from banks. Though it had identified ICICI Banking Corporation as a possible partner it is also in talks with other banks like Canara, Vijaya and Vysya Banks for the purpose,'' added another panel member.

``Some these banks have already approached us with proposals. However, a decision will be taken only at a later stage. Money is not the determining factor vis-a-vis the bourse. We are also planning talks with some foreign banks for the purpose,'' said Shah.

The bourse is likely to be christened as the `India Coffee Exchange'. The panel has already sent this name and six others to the Registrar of Companies (RoC) for approval. It will have a president at the helm and a board of directors.

Though the company has not identified premises for its operations, it is likely that they may use the existing facilities at Coffee Board after getting the required approvals.

The panel has also enlisted the services of G Ramachandran of Unit Trust of India Securities for formualating the draft guidelines of the coffee futures exchange. Ramachandran was earlier associated with the international pepper exchange which is likely to commence operations in Kochi soon.

``The futures exchange is not at all transparent. Basically, we are sure whether we stand to gain or lose. The bourse should be government-driven and not industry-driven,'' opined a leading coffee grower. ``We are still unsure whether the Coffee Board will participate in this,'' said a plantation owner in Coorg.

There are also apprehensions that the project may not take off at all due to paucity of funds and lack of sponsors. A section of the industry feels that the bourse will be dominated by a cartel of big growers. In such a scenario the small grower will be at their mercy, they add.

The Chikmagalur meeting will also formalise the agenda for the next three sittings to be held on all alternate Saturdays at various locations. This is mainly with a view to get feedback from the growers, said industry sources. The committee will also publish booklets in Malayalam, Kannada, Tamil, Telugu, Hindi and English on the various modalities of a futures contract.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.