NEW DELHI, SEPT 26: Corporation Bank will invest Rs 75 crore to float a separate company to enter the rapidly growing government securities market, a top bank official said.The bank has already got in-principle approval from the Reserve Bank of India to trade in government securities and other debt instruments through primary dealership, the bank's chairman, R S Hugar said. "We plan to invest Rs 75 crore initially for foraying into the gilts markets through primary dealership," Hugar said adding this was the bank's maiden venture in the gilts market.Corporation Bank has already sent a draft agreement to RBI detailing the capital structure and parameters for carrying out the new business, he said. "We hope to sign the memorandum of understanding with the apex bank at the earliest and the new business is likely to commence operations by the end of 1999," Hugar said.Trading in government securities has grown rapidly due to the entry of primary dealers leading to a highly competitive bidding process, hesaid.The bank would set up separate company with an equity base of Rs 100 crore for the purpose, he said. Asked if the bank had any plans to form a venture capital fund or enter into mutual funds business, Hugar said the bank would prefer to concentrate on the existing business and branch expansion plans.
