Strategic investment in CDSL to continue
"BSE's bid to modify its status to become more competitive will have a little impact on the company."
Kolkata, July 18
Bombay Stock Exchange's attempt to corporatise will not affect BoI Shareholding Ltd, the joint venture with Bank of India that undertakes clearing activities for the exchange, at least for the time being.
BSE's bid to modify its status in order to become more competitive will have little impact on the company, in which the bank has a dominant 51 per cent stake, said Mr M. Balachandran, CMD of BoI.
"As of now, there is no change and the JV remains the way it is. BOI Shareholding will continue to manage the clearing house functions of the exchange," he told newspersons here on Tuesday, ending speculation that the arrangement will have to be re-worked in the context of the BSE initiative.
The bank's association with the exchange, it may be mentioned, has a long history, going back to the 1920s.
Settlements were managed by its staff manually for a number of years, BSE has acknowledged, adding that a great increase in volumes was noticed in the mid-1980s.
The exchange, which also requested the computerisation of the clearing house, subsequently formed the JV.
BOI Shareholding, it is felt, has its work cut out because of BSE's position as a major bourse.
The company, incidentally, is the first securities clearing outfit to have won the ISO 9001-2000 certification. It paid its first-ever dividend in 2002-03.
Mr Balachandran also mentioned that BOI will continue with its strategic investment in Central Depository Services (India) Ltd (CDSL), another BSE-promoted venture that has emerged in the context of capital market reforms.
CDSL, flagged off in 1997, has participation by a few other banks as well.