Mumbai, Aug 8: The Stock Holding Corporation of India Ltd (SHCIL) plans to start stock lending activities by October this year. The country's largest custodian is also aspiring to become a global custodian as well as a full fledged bank.

SHCIL has also decided to sell its Rs 100-crore worth share storage facility at Navi, Mumbai. The custodian has registered an 80 per cent increase in net profit to Rs 9 crore in the first quarter of the current fiscal, from Rs 5 crore in the corresponding period of the previous year.

Speaking on his plans for SHCIL, BV Goud, who took over as the managing director of the custodian on Thursday, told The Financial Express that SHCIL had posted a net profit of Rs 14.5 crore for 1996-97 and had declared a dividend of 25 per cent.

He said that an offer of shares to the existing shareholders in the form of preference capital could be considered.

As regards the commencement of stock lending for which SHCIL has already received intermediary status, Goud said the scheme had been drafted and a committee had been set up to finalise the implementation.

He said the software had already been purchased and commenced its customisation. He hinted that as per the blue print, stock lending through dematerialised shares would invite lesser fees given the low risk involved as well as the cost saving due to absence of any registration fee payable in lending through dematerialised shares.

``In my opinion there are certain steps that can be considered which will enable SHCIL to become a global player'', said Goud.

Elaborating on the plan, Goud said that the first step would be to find ways in which SHCIL can become a global custodian.

``Earlier there was a stipulation on networth for a global custodian set by the US regulatory authorities. However, we are told that there have been relaxations on this front and so we will work on this. If need be we can increase our networth as well,'' he said.

As regards plans to set up a full fledged bank, Goud said SHCIL had already applied to the Reserve Bank of India for obtaining approval to function as a limited purpose bank.

``We may consider applying for a full fledged banking license as a lot of our competitors in the field have the advantage of a banking facility as well,'' he said.

The Stock Holding Corporation of India also plans to tap a large number of non-resident Indian investors as well as the foreign institutional investors. ``We want investor service to improve and bring back the clients we have lost to our competitors'', said Goud.

On the Rs 100-crore facility set up by SHCIL at Navi, Mumbai, Goud said that they would soon advertise for sale of this facility. He said that the facility at Vikhroli would be further developed.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.