This will be in addition to the innovative kiosk model the corporation will soon introduce, where investors can place buy/sell orders in securities from roadside kiosks placed at partner banks' premises. The first kisok will be operational in the next two-three weeks, said Goud.

Addressing a press conference, Goud said that for high net worth individuals and NRIs, the corporation will offer the facility to trade from home, using the Internet. Anyone willing to invest Rs 14,000 for a smart-card reader can trade from home. The facility is meant to overcome the absence of an Internet-payment system in India.

Unlike Internet-based trading offered bybroking houses in the US, the corporation's model will be based on a network connecting clients, stock brokers, bank and SHCIL. Technically, the trade order is placed on the SHCIL site, which will be cross-checked with the bank for cash balance and the order is passed on to the broker for trade execution by the corporation. The entire process is automated and will take about 10 minutes, said Goud.

The Net-based trading is an extension of the unique Kiosk model that the corporation offers to general investors. The trading will be restricted to dematerialised securities, and will be cash-based. The trade order is executed only after checking with the bank if sufficient cash balance is available in the client's account.

SHCIL has signed agreements with seven banks for utilising their networks for the kiosk trading. They are Andhra Bank, Corporation Bnak, Central Bank of India, State Bank of Patiala, State Bank of Saurashtra, and United Bank of India. Many other banks may join the alliance soon, said Goud,who held extensive meetings with over 30 banks during the last six months on the issue. The corporation will soon sign an agreement with Oman International Bank for servicing NRI investors based in the Middle-East. The NRIs will also be able to trade on the SHCIL site through an agreement with a local broker and a bank with which the corporation has entered into a payment pact.

The corporation has also entered into an agreement with two Mumbai-based stock-broking firms for connectivity. Other brokers are expected to join once the system gets off the ground. A client will be able trade on the site only if his broker is connected to SHCIL for on-line trade execution.

The software for the module was developed by the corporation. The investor can place his buy/sell order on the machine and the rest will be taken care of by the bank, his broker and SHCIL together. To begin with, the investor has to open a savings account with a chosen bank and a beneficiary depository participant (DP) account with SHCIL.After this, he will be given a smart card with a chip attached to it. The investor, on placing his card in the machine, will be given a pin number to operate the system through the touch-screen network and a user-friendly software. "The orders will be placed through the system, and SHCIL will provide them with the remaining service by combining the investor's bank, his broker, stock exchange, depository and DP,'' Goud said.

Insight

Service holds the key

The introduction of Net-trading will be positive for the capital market. This will attract more players, as the comfort level offered by direct trading will tempt many more investors to enter the ring. Since trade is accepted only after ensuring that adequate funds are available in the investors account, brokers will find trading much more risk and hassle-free than now. However, new risks associated with Internet security are sure to come up. The success of Net-trading will depend on the quality of services. For that, trades should bebased on on-line quotes. Any delay in trades/on-line quotes will hamper the success of on-line trading.