Mumbai, Feb 20: The Industrial Development Bank of India (IDBI) has decided to dematerialise 100 per cent of its holdings in various securities which are currently available for dematerialisation.In a related move, with the shift to demat fast gaining currency, registrars are seeing a huge inflow of share transfer requests, the quantum of which, according to some, is greater than the one witnessed even at the time of book closure.
"We have decided to dematerialise 100 per cent of our holdings. This would not happen overnight and would be done in due course of time, taking the administrative procedures into account," said IDBI executive director PV Narasimham.
IDBI had earlier decided to demat 50-55 per cent of its holdings in securities which are currently available for dematerialisation.
Market sources said that the first step towards 100 per cent demat has already been taken by the institution by submitting an additional 41 lakh shares of State Bank of India (SBI) for dematerialisation.
Withcompulsory dematerialisation for institutions being insisted upon by Sebi, there is a feeling among institutions that they should dematerialise all their holdings. "The message is loud and clear. Today, it is eight securities. Tomorrow, it will be all. Institutions might as well start moving towards full dematerialisation," said a depository source. According to depository participants, a number of foreign institutional investors who had till now remained content with merely opening accounts, have now actually started dematerialising their holdings. "The flow is unprecedented. It is even more than what one got at the time of book closure period in securities. The demat fever has definitely caught on," said a source at a leading registrar.
CSE sets April 6 deadline for joining depository
The Calcutta Stock Exchange (CSE) has realised the urgency of joining the depository and has set itself a deadline of April 6, this year, for doing so. This deadline coincides with the deadline set by SEBI for theNational and Bombay stock exchanges to allow delivery of demat shares in the physical segment as well.
A high-level delegation of CSE officials along with senior Price Waterhouse executives recently visited the NSDL and informed top officials there that they would like to be connected with the depository before the April 6 deadline.
Sources said that once the latest SEBI diktat comes into effect, there will be a major surge in demat trading volumes and exchanges which have not linked themselves with the depository to offer trading in demat shares to investors would stand to lose.
Exchanges like Calcutta and Delhi, which are in direct competition with NSE, would lose out more business if they do not offer the service to investors.
CSE's entry into the demat mode has been hinging on it getting its trade guarantee fund up and running. The fund has already obtained an in-principle approval from SEBI.
"We will extend all support to exchanges wanting to link up to NSDL. They can either set up a TGF on thelines of BSE or a clearing corporation on the lines of NSE or come up with a third model as well. We are open to any suggestions from them," said a top depository source.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
