I-Sec to introduce e-broking service
icici.com
Source : MI
Sep 7, 1999, 11:24:38 AM
The ICICI group will launch the first online broking system in the country in December. The system will enable investors to buy and sell shares through the Internet.
In the first phase, it will be available only for trading on the National Stock Exchange, ICICI Bank's senior vice-president Neeraj B. Bhai said. The service is most likely to be launched by ICICI Securities and Finance Company (I-Sec) which has a NSE membership and will require the investor to have an account with the bank.
At least 50 brokerages in the country have started preparing for Internet trading but most of these initiatives are in the preliminary stage. ICICI has already done a lot of groundwork on security and data integrity for its internet banking product - Infinity - which has come in useful for implementation of e-broking, Bhai said.
The basic issues involved in any transaction on a public network like the web is verifying user identity and ensuring authenticity and integrity of data. By allowing internet trading only to account holders, ICICI will be limiting its risk and also ensuring the investor's account is debited or credited online. As a precaution, investors will not be allowed to take positions higher than their deposit amount.
Until recently, the Department of Telecommunications regulations did not permit the exchange trading network to be connected to the internet. With this hurdle eliminated, ICICI plans to have seamless connection between the broker terminal, bank and depository. Trading will, however, be confined to demat scrips.
In another major initiative, the group is also undertaking a project involving online merchants like Rediff on the Net and bababazar.com to set up a payment gateway. This will bring greater security to online shopping with credit cards as the user's credit card number will remain hidden from the merchant establishment.
Once the user enters his credit card number at a site to make an online purchase, the number will be sent to ICICI Bank, which will check for the number's validity and credit limit and sends a confirmation to the merchant. The bank is currently working with Visa and MasterCard to make this possible.
This project is expected to go live only after March 2000 because the bank needs a software component from Visa and MasterCard, which allows verification of data. ICICI also proposes to launch its own credit card sometime next year.
The investment needed for the payment gateway and the e-broking system will be higher than what was required for 'Infinity'. The bank currently has 8,000 Infinity customers. Plans are on to expand this base by giving its 1,50,000 ATM holders access to Internet banking.
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