The NSE, which had been approached by UTI and SHCIL to join hands with it after the exchange itself decided to become a stocklending intermediary, is upset that the July 1 deadline for the latter to begin stocklending has been deferred by two months.

Sources informed The Financial Express that SHCIL had panicked when it learnt that the NSE Clearing Corporation had decided to become an intermediary itself -- getting into direct competition with SHCIL.

The NSE decision to get into the activity was in itself prompted by the delay on the part of SHCIL to commence stocklending, norms for which had been cleared by Sebi over a year ago.

SHCIL is believed to have approached the National Stock Exchange to join hands as a facilitator of stocklending so that the activitycan kick off. Without abandoning its decision to get into stocklending, the exchange worked out an agreement with SHCIL and the Unit Trust of India. This agreement envisaged the role of NSE as a facilitator for stocklending by providing an interface between brokers (who would be the net borrowers) and institutions (the net lenders).

"We thought that till we get our approvals from Sebi for commencing the exercise, we would join hands with SHCIL and UTI and get the activity off the ground. ``It was supposed to have been kicked off on July 1, but yet again, they have delayed the launch. We are now going to go all out to get into the activity on our own", said a top NSE source.

As an intermediary, NSE will also guarantee the stocklending activity which it would not have done under the tripartite agreement with SHCIL and UTI."We will, however, still play the role of the facilitator for SHCIL and UTI once they do decide to launch the activity. ``But our priority now is definitely to get into the activity in abig way", said the NSE source.

NSE's desire to kick off the activity as early as possible stems from the fact that it views stocklending as a counter to badla or carryforward which is in place at the rival Bombay Stock Exchange (BSE).

NSE officials say that the same benefit would accrue to its members if stocklending takes off -- ie, they too would be able to meet their delivery requirements by borrowing shares. Hence the sense of urgency.

NSE has decided to undertake the activity only in respect to demat shares for a start and will provide for counterparty risk cover for lending activity done in this form.