A STUDY OF CUSTOMERS EXPECTATION TOWARDS DEPOSITORY PARTICIPANTS OF BANGALORE CITY

A STUDY OF CUSTOMERS EXPECTATION TOWARDS DEPOSITORY PARTICIPANTS OF BANGALORE CITY

The exponential growth of the capital market witnessed in recent years had resulted in a near complete breakdown of the paper based transaction system. The amount of capital raised has shot up, the number of issues had increased substantially, trading volumes on the stock exchanges had grown several fold and the markets had become institutionalised with the entry of Foreign Institutional Investors (FIIs) and private mutual funds. As a result, there had been an increase in paper work causing a gridlock at every stage. This delays the clearance and settlement of trades, registration of securities and increases back office paper work for intermediaries. The outdated systems had increased settlement risks and have rendered the implementation of a Delivery versus Payment (DP) system impossible. The systemic risks face further threat by theft, forgery, bad delivery, issue of fake share certificates and loss of certificates. This had eroded investor confidence. In this scenario, it was felt that the setting up of a Depository and introduction of scrip less trading would improve the efficiency of Indian Capital markets. Investors also face lot of problems in registering the certificates, and also lose money and time because of fake certificates and bad deliveries in traditional manual method of transaction system. These demerits are reduced in the on-line trading system. Most of investors go to the share brokers to for any of the services to be availed may be professional help or online trading system. The purpose of this study is find out what are the customers expectations from the depository and depository participants, what are the rules to be followed by the depository, depository participants and investors. There may be various factors which may affect the customer while choosing the depository participant. The study is undertaken to perform the comparison of various Depository Participants in Bangalore City and the customers perception about the Depository Participants. The Descriptive Research and Analytical method is selected for this study as the data will be collected from the sample containing a large number of customers. Convenience sampling is used for this research. This study includes the investors of Bangalore Stock Exchange in Bangalore city. The sample size will be 200 respondents. The study will take into account the following 5 different depository participants: Bangalore Stock Exchange Industrial Credit and Investment Corporation of India (ICICI Bank) HDFC Bank The Vysya Bank Ltd. Stock Holding Corporation of India Ltd. The study also contains certain limitations such as this study will be restricted only to Bangalore City due to time constraint. The study may be limited to the extent of information and materials provided by the stock exchange and the customers. The major findings of the study are as follows: ?It was found that dematerialisation of the securities is the most favourable among respondents with 39% ?Almost all respondents have rated their DP services either good or average ?It was found that 78% of the respondents do not want to change their existing DP only few want to shift to the new DP ?Most of the respondents prefer convenience as the major parameter for selecting their DPs other factors have less criteria ?Most of the respondents feel that the price charged by the DPs are reasonable and their execution of orders are faster ?Online trading services provided by DP are good and the DPs are approachable in respect of any factors such as to resolve problems ?The access to professional assistance given by the DPs are rated to be good by the respondents ?The respondents have rated that probably they would recommend others to be a member in the particular DP ? There is no significant relationship between price charged by various DPs and choice of particular DP ?There is no significant relationship between time taken to open an account by various DPs and choice of a particular DP Conclusion: in todays technological world where technology keeps changing on day to day basis, online trading of securities market has a bright future where Bank DP as well as BSE should to bring awareness among the customers and as well as attract the customers to invest on securities.

S. Susan

Commerce