This is also applicable to trades settled under auction, objection settlement and bad delivery settlement.

Speaking to The Financial Express, NSCCL chief executive officer ML Soneji said: "We are going to have the funds pay-in and pay-out on the same day. This is planned to be done in two phases. In phase one, the pay-in and pay-out of funds settled under rolling, auction, objection and bad delivery settlement would be done on the same day. In phase two, the normal account period settlement would be incorporated.""The first phase is likely to start off in the early part of February 2001.

We have to see whether the settlement system runs smoothly and also need to talk to the select banks empanelled by the clearing agency for electronic transfer of funds to sort out various operational issues", said Mr Soneji.

With the beginning of settlement in the same day, there would be instantaneous movements of funds. In order to efficiently run the transfer of funds, NSCCL has to consider various issues on process and system support and time required with the banks.

At present, all members are required to have accounts with any of these specified banks. The members are informed electronically of their pay-in obligations of funds. As soon as the net pay obligation of a member is determined, NSCCL runs an electronic file with respective clearing banks debiting members' accounts and crediting NSCCL's account. Similarly for pay-out of funds, NSCCL's account is debited and member's accounts are credited. The clearing banks offer Electronic Funds Transfer (EFT) facility, which is used by members from various centres to settle their fund obligations to NSCCL on one hand and release payments to their constituents on the other - there is an overnight gap between pay-out and pay-in.

Mr Soneji also added that National Stock Exchange (NSE) would conduct a mock trading of S&P CNX NIFTY index options by the mid-February and is, at present, talking to members to create awareness about the products. The mock trading is intended to see whether the entire system is working efficiently.

The market watchdog Securities and Exchange Board of India (Sebi) and exchanges have been endeavouring to speed up movement of both funds and securities to achieve delivery versus payment (DvP) in securities transactions, that is final and simultaneous exchange of funds and securities.