ICICI Bank wins tea mandate

Calcutta, March 13: The Tea Board has appointed ICICI Bank as the new settlement banker for holding pan-India auctions after a search for nearly four months.

"We have selected ICICI Bank as the settlement banker for the e-auctions from a total of five bankers and it is currently working with NSE.IT to align the software," Santosh Sarangi, chairman of the Tea Board, told The Telegraph.

A senior official of ICICI Bank confirmed the development.

The Tea Board issued the request for proposal for the appointment of a settlement banker on November 25, 2016. The last date for submitting the proposal was December 16.

The pan-Indian e-auction module was rolled out by the Tea Board in June last year in all the seven centres - Calcutta, Guwahati, Siliguri, Jalpaiguri, Kochi, Coonoor and Coimbatore.

In September, the post-auction module was implemented with the Bank of India as the settlement banker.

However, several technical glitches and payment and operational issues cropped up, forcing the Tea Board to put the post-auction settlement process on hold with effect from October 18.

According to sources, payments to sellers and producers worth Rs 133 crore had been held up.

The tea regulator then re-introduced the earlier payment procedures till all the technical issues were addressed.

Previously, the State Bank of India and IndusInd Bank were handling the auction payments. The tea industry had lobbied hard to retain the SBI and IndusInd as the settlement banks till the goods and services tax (GST) was in place.

However, Sarangi said, "ICICI Bank has all the required software solutions. So, we settled for them. Moreover, the SBI had quoted a very high price."

It would take at least three months for ICICI Bank to start its services.

"As soon as the banker is ready with its software, we will hold a meeting with the industry stakeholders, including brokers and sellers, to identify more areas of improvement. Once this is in place, we will run a pilot test in a single auction centre and then we will scale up accordingly," said the Tea Board official.

According to a tea producer, bringing in a new banker is not the solution. "The Tea Board needs to direct NSE.IT, the software developer of the post settlement module, to build its product in a way that will ease the entire financial transaction process both for the banker as well as the industry stakeholders," he said.