RBI's chief general manager in charge of debt management, Usha Thorat, said that the central bank was working towards a real-time gross-settlement system (RTGS), with real-time links between the various intermediaries in the financial markets. Complete automation of securities trading and public debt was the ultimate goal, she said.

In many countries, there was a link between payments system and securities clearing through depositories, she observed.

The International Bank for Settlements was pressing for minimum standards for securities settlements system which will be integrated with a payments settlements system. Many countries also follow the concept of a final settlement through a central bank account - such sort of a system would require electronic funds transfer (EFT) and if not RTGS on an immediate basis, at least settlement in the same day, Thorat said.

Talking about risk management in a seminar by Invest India Foundation, Thorat said that it was necessary to have a repo-market where not only clearing and settlement were handled, but the risk aspect had to be handled as well. The RBI was looking at not only allowing repos to be done by a wider cross section of players, but also wider range of repo products. At present, repos are done only in government securities, and it can be done only by current and SGL (subsidiary general ledger) account holders.

Assistant professor at Indira Gandhi institute of Development Research, Ajai Shah, said that setting in place risk management systems was progressing very slowly in the country Liquidity risk show ups, he said, only when the price reaches the limit. He stressed on the importance of fund managers marking-to-market their portfolios on a daily basis.

"No intermediary," he declared, "does mark-to-market of its portfolio everyday." There was no concept also of risk being factored into the pricing of securities. Chrysalis Capital's chief finance officer, Luis Miranda, said that one reason why the financial markets were not developing was because, "market participants are not interested." Typically, he said money market dealers have been mostly borrowers and lenders and do not do much of buying and selling.