Financial Daily from THE HINDU group of publications
Saturday, Aug 20, 2005
Money & Banking - Pension Plans
NSDL eyes record-keeping agency role for pensions
Kolkata , Aug. 19
NATIONAL Securities Depository Ltd (NSDL) has scaled up its efforts to emerge as the record-keeping agency for the newly formed pensions authority.
The NSDL move may be seen in the backdrop of some of the latest developments on the pensions front. Mr C.B. Bhave, CMD, said these developments were leading to more clarity insofar regulations are concerned.
"Over the past few years, we have gained considerable experience with regard to a number of new areas. These include the new Tax Information Network and warehouse receipts," he said, adding that the depository now expects to be chosen as the central record-keeping organisation for pensions as well.
The regulatory body will of course be the final arbiter on this issue, it is pointed out. Moreover, no selection criterion has been announced so far. Nor has NSDL (or any other organisation) responded to a specific `expression of interest'.
The depository is now looking at an increase in dematerialised debt, especially with respect to retail investors who hold debt instruments such as tax-saving bonds and longer-duration paper. The Government has already initiated a move (spearheaded by a committee under Dr R.H. Patil, former NSE chief) to take up the case.
Mr Bhave, incidentally, has ruled out further rationalisation of fees by the depository - especially after NSDL's recent decision to cut settlement fee charged to depository participants and corporate action fee charged to issuers. The new rates will be effective from October 1.
"We have tried to reduce charges in line with increase in our volumes. This has been done keeping in mind the interests of the users of the depository mechanism," he told newspersons.
Meanwhile, NSDL's latest activity relates to the nation-wide tax network (or TIN, as it is now called popularly), created on behalf of the I-T department. This, it is hoped, will do away with the process of manual issue of TDS certificates. The target is "one hundred per cent accuracy" in line with the Government's wishes.
Demat requests pile on
NSDL has lately seen a virtual explosion in its business, thanks largely to a marked increase in the participation of retail investors. This is best reflected in the number of demat accounts registered with it 66 lakh now, against the 38 lakh recorded about three years ago.
"No, it is not the institutional players who are responsible for this. Retail investors, and not even HNIs, are here in a big way," Mr Bhave said, adding that the depository has started recording a huge number of demat requests.
Roughly speaking, four lakh demat requests (or about 16,000 per day) are pouring in per month a trend that has been witnessed for some time. In the last one year or so, 1.7 million new accounts have been opened, while the aggregate value of securities dematerialised with NSDL stands at over Rs 16.8 lakh crore.
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