Talking to reporters here on Monday, director of CDSL, MG Damani claimed that he would overtake NSDL in terms of securities handled per settlement within the next two months. At present, he said, CDSL had 80 depository participants and 1,200 companies against 140 DPs and 1,300 companies associated with NSDL. As on date, CDSL has about 50,000 investor accounts which is expected to go up to about 2 lakh in the next couple of months.

Incidentally, NSDL with over four year history has over 28.5 lakh retail accounts and value of securities dematerialised over Rs 3,76,000 crore. Damani maintained that CDSL was able to earn profits in the very first year of operations because of its low-cost structure and income from surplus funds of about Rs 70 crore. In the year to March 31,2000 CDSL earned income of Rs 11.42 crore on deployment of surplus funds at its disposal, he clarified. CDSL's profit after tax was Rs 4.29 crore on total income of Rs 13.23 crore. In the current year, CDSL's income generation is expected to shoot up on the back of higher volumes of business handled and a corresponding decrease in NSDL's volumes, Damani explained.

Expressing strong views against levy of charges on inter-depository transfer of securities, Damani said this was not tenable in law although the Jhunjhunwala Committee (appointed by Sebi to look into the issue) is yet to submit its report. "Sebi has made it clear that no charges can be levied in the interim period, and even if the committee rules in favour of the charge, it will be only with prospective effect," he pointed out. Among the changes made in rate structure by CDSL, the transaction charge on the value of securities transferred through the off-market route and deliveries made to and by investors has been reduced from 0.02% to 0.005%. Besides, clearing member's settlement-related accounts will be free for pay-in while pay-out will attract a flat fee of Rs 500 per month per clearing member irrespective of securities value.

Transaction charges for on-market transfer of debt instruments are nil for pay-in and 0.01 per cent for pay-out of securities, subject to a minimum of Rs 50 for each transaction. CDSL has decided to waive transaction charges for on-market transfer of government securities till March 31,2001. For all off-market transaction in debt securities, the charge has been fixed at 0.01%subject to a maximum of Rs 50 per transaction. There will be no transaction charges in respect of transfer of commercial paper.

However, in case of corporate actions of commercial paper, a flat processing fee of Rs 5,000 will be levied on the issuer. A charge of 0.01 per cent will be levied on the value of transaction to the pledge only for invocation of pledge and creation or cancellation of pledge will not attract any charge.