STCI chairman D Basu disclosed this to reporters on Monday at a press conference, immediately after the primary dealer's annual general meeting.

STCI has also urged National Securities Depositories Ltd (NSDL) to issue government securities in the demat form to retail holders. It will stop publishing its call rates from October.

STCI, along with five other primary dealers, has set up a working group to prepare a report on trading and settlement system which will be placed before the Reserve Bank of India in 1998.

Commenting on the poor performance of the company in the current fiscal, Basu said, "Some kind of an insulator is required by the central bank to take care of the needs of primary dealers like liquidity support. We do not want a discretionary refinance facility from the central bank, but a contractual obligationon the RBI's part," he said.

He further said that the central bank should also open a buy window under its open market operation (OMO) for some benchmark dated securities to give some measure of confidence to the holder of securities.

On the role of primary dealers in the securities market, he said: "Primary dealers should act as an intermediary between the holder of securities and the market."

He also stressed on the adverse impact of the steep hike in short-term interest on the gilts market. "Interest rates are expected to tighten. However, it will depend on the happenings in the forex market," he said.

According to him, the proceeds of the Resurgent India Bonds (RIB) in the system will help the centre comfortably complete its borrowing programme.

On the company's performance, Basu said, "The current year is a difficult one as the gilts market is subdued due to the RBI measures which have been taken to curb volatility in the forex market. This has resulted in a sharp fall in government securitiesprices."

In 1997-98, the company's net profit registered a growth of 62 per cent to Rs 98.36 crore against Rs 60.62 crore in the previous year. The company has recommended a dividend of 10 per cent for 1997-98 compared with 7.50 per cent in the previous year.