In other words, to borrow Rs 100 worth of shares a collateral worth Rs 125 would need to be deposited with the intermediary. The country's largest share custodian, is now awaiting a nod from the Unit Trust of India (UTI) to kick-off the activity, which has by now been pending for long.

Its rival stock lending intermediary, the National Securities Clearing Corporation, has fixed a collateral of 120 per cent of value of securities lent.

Speaking to reporters, SHCIL managing director, BV Goud said that the organisation is awaiting the final nod from UTI, with which it has tied-up for stock lending, before it starts off the activity.

As for LIC and GIC, they have sought an amendment in their Act and only once this is done will they be allowed to lend securities.

He said that the issue of who will bear the risk hadbeen sorted out with SHCIL agreeing to bear the risk in its capacity of the intermediary.

Sebi had announced its guidelines on stock lending early last year but still the activity is yet to take-off. One reason for the activity not taking off was the low level of dematerialisation in the Indian markets. No one was willing to take the risk for lending physical shares and not being sure of the title of the securities received at the end of the loan period.

With demat levels rising, this fear is no longer there and Sebi officials are now pushing the intermediaries to start off with the activity.

Giving details of SHCIL's other plans, Goud said that the organisation is tying up with banks to provide depository services. SHCIL has got over 7,000 depository accounts opened with it and is planning to launch a unique "kiosk", which will allow an investor to undertake his entire market activity by using a smart card.

These machines will be placed at various centres. The banks and SHCIL will be connectedthrough V-Sats. An investor will place an order for shares on the touch-screen. The request will be processed and sent to a panel of brokers. The deal will be struck. The bank account of the investor will be verified to see if the amount exists. The amount will be released and the shares will be credited to the depository account of the investor. The reverse process will be followed for selling shares. The concept is expected to kick-off only by the end of the year. Goud said that certain Sebi approvals have been sought.