Banks scrambling for retail depository accounts
Biju Mathew
MUMBAI, January 23: Banks have stepped up efforts to get more and more retail depository accounts opened with them following the introduction of compulsory demat trading for institutions from January 15.HDFC Bank has written to all its account holders in Mumbai inviting them to open depository account with it. The new generation private sector bank will soon extend the service to other metros also. Standard Chartered and Global Trust Bank, the other two banks active in offering depository services, expect the number of individual accounts opened with them to increase substantially in the coming days. The sudden impetus for banks to get more retail depository accounts opened has come from the Securities and Exchange Board of India (SEBI) diktat making it compulsory for institutions to trade in depository shares in eight scrips. "We are getting good response. The momentum has picked up after depository trade was made compulsory in eight scrips for institutions," said KK Rajendran, head, custody and
depository services, HDFC Bank. Similar sentiment was echoed by officials of Stanchart and Global Trust. They expect the number of depository accounts to increase substantially in the coming days as people are now beginning to understand the concept. "We are concentrating on educating prospective account holders about the advantages of using the depository mode and assuage their fears about liquidity," said a Stanchart official. The banks are also planning to offer depository services from centres other than Mumbai. Global Trust will soon offer depository service from Delhi. Most banks had initially restricted depository services to their Mumbai branches alone due to legal block involving department of telecommunication (DoT), in using V-sat networks. Global Trust will be expanding its services to Delhi and other cities by utilising a new software it has devised, which will enable it to countervent the legal block put up by DoT. Other banks are also in the process of developing the software that will
allow them to link up their own on-line system with NSDL's without violating the DoT provisions.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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