He said a major road block for the growth of debt market in the country was the tedious process of settlement and transaction costs involved. He said that by facilitating the conversion of debt instruments to electronic or dematerialised form from the physical form, much of the obsolete paper work involved in the process could be eliminated which would give further stimulus and depthto the debt market. ``We will provide our facilities first in government securities which will be later extended to cover all debt instruments,'' Koshi said.

He pointed out that the SGL 1 accounts of banks were mainly of inter-bank nature and did not need any tedious transaction process as everything was adjusted by the Reserve Bank in its book. However, those transactions which come under SGL 2 account which involves banks, FIs and MFs lead to tedious transaction process resulting in undue delay. He said that with the introduction of G-Sec segment by NSDL, the settlement in the SGL 2 segment would be as easier as in the case of settlement in stock and shares in demat form.

He said a host of stocks exchanges all over the country had approached NSDL for commencing trading in the dematerialised segment. He said NSDL was actively considering the proposals put forth by three prominent bourses, Bangalore, OTECI and MSE. NSDL was finalising the modalities and would admit these SEs in a short while. With theiradmission, the total SEs which had demat trading would go up to eight, he added. At present, besides NSE and BSE , Ludhiana, DSE and CSE are members of NSDL. A host of other SEs had approached the NSDL for membership but the depository had made it clear that only those with a trade guarantee fund could be admitted to the depository as members.

The market regulator's decision to confine settlement in a host of securities from next year onwards in demat form had gone a long way in helping the NSDL business grow by leaps and bounds. He said that as on October 28, more than 30 of the total settlements done on NSE were in demat form while in case of BSE, it was well over 41 per cent.