Canara Bank, United Bank of India, Stock Holding Corporation of India and Uco Bank are vying to get the mandate for setting up the clearing house system at the Calcutta Stock Exchange. The CSE clearing house is expected to be finalised by January 24.
Canara Bank officials met CSE advisor and member Ajit Day and the bourse committee members Vivek Mahajan and Suresh Jalan on Saturday to discuss their terms and submit the MoU draft for the CSE clearing house.Majority of the brokers are of the opinion that Canara Bank is more efficient than United Bank of India and sound in man-management.Sources say that this opinion, based on past banking experience, could be a major influence on the final choice.
Canara Bank is already a member of BSE and NSE, which is an important point in its favour. UBI is expected to submit a written draft to CSE on Monday. Now the question to be debated by the Calcutta bourse is the trade-off between Canara Bank's record of greater efficiency and UBI's advantage of being able to provide a venue for the clearing house in the same building as the stock exchange. Besides, Stock Holding Corporation of India Ltd (SHCIL) has also entered the fray for the clearing house.
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The point in SHCIL's favour is that it is a depository participant with NSE. Hence, if SHCIL gets approval for the clearing corporation, CSE will find it easier to participate in trading in the dematerialised form. However, CSE has chalked out big plans and the clearing house, which will later be converted into a clearing corporation with all the functions of trade guarantee, is just one step in a larger scheme.
Sources said that the matter favouring SHCIL may cease to be so as CSE may itself become a depository participant with NSDL in the near future.
In a strange twist of events, Uco Bank has also entered the race for the CSE clearing house.
Uco Bank has a branch at 2 India Exchange Place, which incidentally houses about 20 broker offices. In the on-going C-STAR project, these brokers come under the local area network (LAN). Accordingly, CSE had to lay internal cables in the building.
But Uco Bank authorities opposed the move and held up work. As a result, CSE had to call a meeting with Uco on Saturday to solve this deadlock. The meeting resulted in yet another bank joining the fray with Uco submitting its bid for the CSE clearing house.