Brokers comprising of the Committee on Settlement Issues (Cosi) of the National Stock Exchange (NSE), at a recent meeting are believed to have voiced serious concern over the manner in which the banks were taking their business of providing depository services.

The figures too do not speak much for bank DPs, who have so far been able to garner only a little over 20,000 accounts as against 37,000 accounts opened with broker DPs.

The reason for the concern is based on the fact that an investor has far greater trust on a bank rather than on a broker. And he is only going to put his investments in the hands of an entity he trusts to the fullest.

Against this backdrop, the failure of the banks to view the depository business seriously has led to a piquant situation where the broker DPs are actually commanding a far greater share of thebusiness.

Brokers at the Cosi meeting in fact even went to the extent of saying that brokers should not be allowed to get into the DP business at all. This view was, however, debunked on the grounds that there are some brokers who enjoy significant amount of trust. "In fact abroad some broking outfits have emerged larger than some banks", felt a broker DP.

The problem for other brokers is that they are not too keen to open accounts with a broker DP for fear of him knowing investment details. In the absence of banks rising to the occasion brokers are finding it difficult to move to the depository.

Apart from a handful of private sector banks which had started off the depository business with a lot of enthusiasm there are hardly any banks who are aggressive in the business.

"Most of them have not even realised yet the enormous business potential that exists. The few private sector banks who did start off well did not anticipate the growth potential and are hence finding it difficult to cater to thedemand from investors", said a market source.

"There were several complaints against the banking DPs and a senior NSE official even remarked that it took him one month to get an account opened. In contrast we open an account instantaneously", said a broker DP who is on Cosi and has carved out a big depository business for himself.

Depository officials said that they have urged the bank DPs to formulate a business plan and expand soon as a large investor base is waiting to enter the depository, through these banks.

While broker DPs have found innovative ways to expand their operations, bank DPs continue to provide service from a handful of centres. This is impeding their own growth as well as that of the depository.

"If the banks do not wake up they might well lose out on a major business opportunity. The public sector banks still do not seem to have woken up to the immense business opportunity", said a market source.