Geojit Securities, which has created a record of sorts by providing depository services from more than 600 locations across Kerala, too has not escaped the pressure of heavy dematerialisation.

"There was a time when a demat request would remain with us for about three days before it was forwarded to the registrar. This time was taken for processing the request. However, despite having redeployed a large number of staff from the broking back office to depository operations, we are today faced with a backlog of about five days", says George.

"At any given point of time there are at least three clients in our office being counselled by an equal number of staff. Investors have questions and these have to be answered through good counselling, something which every depository participantwould have to lay stress on. We expect the number of demat requests coming in increasing sharply in the coming weeks and we are prepared to handle these simply because we have laid a lot of stress on training and redeployment of staff which has become possible owing to heavy dematerialisation", says George.

Geojit Securities has gone a step ahead of the regulator and said that from January 4 it would not accept paper in as many as 53 securities, as against 12 spelt out by the regulator. George says that sooner or later depository participants like him may be forced to increase certain charges like those for dematerialisation. "We have till now been charging Rs 2 per certificate, but such low charges cannot be sustained for long. We as brokers will still be able to make some money through brokerage which too will come down in the future, but other DPs will find it extremely difficult to sustain such low charges", he says.

An interesting feature of electronic settlement has been the ability of localisedbrokerages like Geojit Securities to think global. With transfer of paper no longer a constraint and better communication links facilitating easy flow of information, players like Geojit Securities are looking at expanding their reach across the country.

It is already in talks with Satyam Infoway, the new internet service provider, for an intranet facility, and once this is in place, this Kerala-based DP may well be operating out of Panjab. For the time being, however, Geojit is eyeing the Mumbai market. "There is a tremendous potential in Mumbai which DPs are yet to tap. With banks not going whole hog, we see a great business opportunity in Mumbai", says George.