Market-making still some way away in India: FMC chief

"We have open mind for introducing any concept to develop our market. But the time is not ripe (to introduce the same) without the participation of banks and other financial institutions," Khatua said.

His statement comes in the wake of an application made by National Commodity and Derivatives Exchange (NCDEX), India's second largest bourse, seeking regulatory approval for market-making.

"Even exchanges are also aware of it and they are waiting till markets get larger participation," Khatua said.

Indian commodity markets are lacking liquidity and depth in the absence of participation by banks, mutual funds and other financial institutions, as they are not allowed under the current laws.

"Even the concept of farmers' participation via aggregators is also not taking off, despite persistent efforts by the regulator and the exchanges for the past few months," Khatua said.

Market maker provides two-way quotes