Centurion signs pact with IL&FS for broking services

Centurion Bank of Punjab has signed a memorandum of understanding (MoU) with IL&FS Investsmart Ltd (IIL) for offering equity broking services to its customers through IIL's delivery platform.

This will provide Centurion Bank customers the advantage of seamless trade and funds for all their equity transactions through the IL&FS platform, said the bank's CEO and Managing Director Shailendra Bhandari.

Meanwhile, Hemang Raja, IIL CEO and Managing Director, stated that the "alliance is a step forward in realising our vision of being able to extend services to a large customer base. Online trading is gaining popularity among investors as it gives them the necessary power and information to trade at their convenience."

The MoU is a referral arrangement and will see the creation of a new market by leveraging on the core competencies of the two institutions, he added.

Other private sector banks such as HDFC Bank and ICICI Bank have already introduced the '3-in-1' account. The account combines features of a savings account, online trading and a demat (dematerialised) facility.

Through 3-in-1, a bank typically integrates the account of its brokerage arm, the savings bank account and one or more demat accounts. The customer can access, trade or execute transaction in funds/shares through the linked demat/bank accounts.

The system checks the funds and the shares available in the savings bank account and the demat account respectively and, then, execute trade on the exchange online. Both the savings bank account and the demat accounts get automatically debited or credited.

Another option a customer could exercise is: place market orders during trading hours, thereby availing of the best obtainable price.

The customer, in fact, defines the price of the stock. The transfer or trading of shares is almost seamless with minimal waste of time during the movement of funds and shares.

However, in this case, the brokerage fee for online trading is higher at 0.08 per cent against the normal 0.03 per cent. Centurion Bank has fixed its brokerage fee at 0.50 per cent.

The bank also plans to offer credit cards in the next couple of months. "Bank will soon launch credit cards which can be in the form of a joint venture or through outsourcing our processing or through a `White Label'," said Vivek Vig, the bank's country head (retail banking).