He later told newsmen that this was his personal opinion and 100 per cent dematerialisation was feasible and already achieved in some countries. However, he clarified that some legal changes were necessary and the attention of the government had been drawn in this regard.

Kar pointed out at the provision in the Depositories Act which gives the option to an investor to dematerialise securities and also rematerialise at will. Once the legal changes are incorporated, "in one stroke, we would have cleaned the markets from some of the ancient ills which ail the market. Rolling settlement also will become then a reality," Kar observed.

He disclosed that Sebi was going to introduce some"far-reaching" changes in the procedure of dematerialisation and reducing the time taken for dematerialisation, which now varies between 30-45 days.

"By curtailing to and fro movement of shares between custodians and investors, we are also hopeful that it would be possible to introduce the scheme for dematerialising securities in the no-delivery period," Kar noted.Another area, according to Kar, which would have an impact on trading practices is stock lending activity for which Sebi has approved the applications of UTI and more recently the National Securities Clearing Corporation.

Giving statistics to show that the demat concept was fast gaining momentum, Kar said scrips worth Rs 40,000 crore had already been dematerialised by NSDL. Although deliveries in demat shares have been around 10 per cent of the total market deliveries, trading volume in demat shares had increased significantly in the last few settlements, he added.

In some of the scrips which were in the first list of 8 scrips, about 96 percent of deliveries are now in demat form. The number of depository participants who have registered with Sebi has also increased and they are spread over 110 cities across India.

Kar said retail interest was growing and 40,000 client accounts have become operational, most of which were opened in the last four to five months. He felt that the establishment of the second depository by BSE would further accelerate the demat process.

By October 15,1998, the total number of depository eligible scrips would touch 110 and would include all scrips in the BSE Sensex, NSE 50 index and all actively traded 'A' group stocks, including some PSU stocks, he informed.

On roadblocks in the way of faster dematerialisation, Kar commented that there was the DoT issue of 'close-user group' access which was preventing banks from using their branch network for investor servicing. "We have written to the government to take up the matter with DoT," he revealed. With more active bank participation, investors would respondpositively to dematerialisation, Kar claimed.

On the issue of injecting liquidity in cash group shares raised by Birendra Agarwal, the chamber president, Kar said the G P Gupta committee was examining the issue of illiquid 'B' group stocks and a meeting of the committee was scheduled for next week.

Kar said the committee would also suggest a framework for market making as a tool for improving liquidity in scrips. "Infusion of liquidity is definitely within the radar of Sebi," he remarked.

The president of the Calcutta Stock Exchange, Kamal Parekh felt that the introduction of derivatives trading must be preceded by proper training of the participants. "Half-knowledge will be dangerous," he cautioned.