A COMPARATIVE STUDY OF DEPOSITORY SYSTEMS: ICICI BANK LIMITED

Abstract

The research might end with the assumption that local investors are well-informed about the benefits of depository services for capital market operations. Investors learnt about the depository system via a variety of mediums, including brokers, periodicals, and newspapers. There has been tremendous expansion in the Indian capital market recently. The problem is that the underlying infrastructure has not kept pace with the expansion, so our current system is unable to cope with the deluge of paper. Issues such as high risk exposure, lengthy settlement periods, failed trades and faulty delivery, and delayed transfers have resulted from this. Typically, these traits would be associated with a less established market. There has to be a better mechanism in place to eliminate this kind of growth inhibitor as the market expands. Investors from other countries are wary of India's post-trade settlement procedure because of its reputation for unreliability. The Indian capital market's main obstacle was its antiquated, paper-based settlement system, which was a major hindrance to the market's fast expansion. Indian stock exchanges have been continuously reviewing their previous trading mechanism since 1992. There is now less paperwork, easier electronic book entry of security transfers, shorter settlement times, better liquidity in investment securities, and the ability to trade securities automatically and transparently on screens. The result of all this is that India's capital market has been growing. Transferring shares into one's own name really required more time. Because the investor is unable to sell their shares during this period, their liquidity is diminished. Large investors, for whom quick transfers were crucial to keep liquidity levels high, have found this especially annoying. On top of that, there was always the risk of theft or misplacement when shares were physically moved. With the dramatic growth in the daily turnover of the stock market, the problem's scale has grown exponentially. Shares of over 7,500 businesses are traded on BSE alone, with an average daily transaction of Rs. 500 crores. Over 30 million investors in the nation use over 650 brokers to facilitate this trading. Because of this, we now have to rely on more efficient methods of data transport, such as digital records instead of paper ones (security).