The technical teams of both the depositories met recently and it was agreed that it would take atleast another two weeks to attain connectivity between the two.
Sources said that Sebi has been sounded on the decision to extend the deadline. Sebi chairman D R Mehta was not available for comment.
Getting connectivity is a technical issue as an effective interface has to be developed between the two systems.
The delay has been attributed to the software being used by both the depositories, which are very different from each other.
Earlier this month, Sebi convened a meeting of top officials of both the depositories to sort out the delay.
The Sebi chairman is keen, that connectivity is achieved at the earliest so that the second depository can commence operations. August 7 was fixed as the date by which the problem could have been solved provided no further technology glitches surfaced.
Sources said that given the various complications it is going to still take some more time. "The technical teams from both sides have agreed to defer the connectivity by another two weeks," a source said.
Considering that the interface has to be tested for Y2K compliance tbe connectivity may be further delayed by a week, the source said.
The CDSL has started fledgling services but the dematerialised shares can be settled only within their own account base.
The National Securities Depository Ltd (NSDL) was the first depository in the country set up in late 1996. Over the past couple of years, the dernat culture has grown rapidly and-more than nine lakh accouats have been opened.
More than 100 depository participants hzve been enrolled by the depository.
The Depositories Act provides for multiple depositories and Sebi regulations on depositories provides that there would have to be connectivity between the depositories in the event of there being more than one depository. Sebi has been pushing for a second depository, as according to Mehta, it is a "sin" not to have competition in a financial system.
