Currently, UTI has dematerialised 80 per cent of its holdings in those companies where Sebi has asked the institutions to trade only in demat form. In the rest of the securities, the trust has dematerialised up to 50 per cent of its holdings.

Interestingly, Sebi has expanded the list of mandatory demat trading for institutions to 235 and this includes all but a handful of companies which are offering the demat facility to investors. Hence, not only would the percentage of shares dematerialised per scrip increase, so will the number of scrips where this increase will be effected increase.

``We have decided to take the levels of demat beyond 80 per cent. We will try and reach 100 per cent gradually,'' said UTI chairman, P SSubramanyam.UTI is the largest investor in the Indian markets with a corpus in excess of Rs 60,000 crore. Despite being one of the promoters of the National Securities Depository Ltd (NSDL), it has chosen to tread cautiously in dematerialising its securities and in the process has ended up not saving a large amount of funds for its unit holders by way of cutting down on custody charges and also eliminating risk in transactions.

Recently, a senior UTI official had remarked that the trust would like to see how the Bombay Stock Exchange (BSE) promoted depository which has promised zero custody charge, fares, before it decides to dematerialise its remaining holdings.

The other argument put forward by UTI was that it does not trade all its holdings at the same time, and therefore, there is no real reason for it to dematerialise all its holdings.

The two points that the UTI top brass missed were: Even if the shares were not traded, by merely holding them in demat form the trust would have saved large amountsand second, even if it wanted to subsequently shift its holdings to the BSE depository, it could have easily transferred its assets to the other depository as the two depositories are bound to have a connectivity as per the Depositories Act.