FIs, banks want govt to ensure investor protection

They were also of the view that the government do away with PAN requirement for sale and purchase of shares. It was suggested in addition that efforts be made to regulate short sales in the market.

President of the Bombay Stock Exchange, J C Parekh told newspersons after the meeting that a safety net could be formed for small investors. The safety net will ensure that promoters buyback their shares from investors in the event of the market price shares falling below the issue price, he said. “The small investor is primarily disillusioned with how IPO stocks have performed, hence it is important that confidence in IPO stocks be built-up,” he remarked.

The major suggestions by the representatives of financial institutions were:

Managing director, ICICI, K V Kamath, said that the meeting discussed ways and means of kick-starting various infrastructure projects, as large projects can go a long way in boosting various industry sectors. It was also suggested in the meeting that lending to infrastructure projects be categorised as priority sector.

Managing director, Kotak Mahindra, Uday Kotak told the media that the discussion debated the possibility of giving tax concessions to mutual funds and venture capital funds. If the mutual fund industry and the venture capital industry are given tax reliefs the beneficial impact will have an immediate impact on the stock market, Kotak said. “Tax rationalisation in the mutual fund area can attract higher funds in the area,” he added.

Earlier, in his introductory remarks, finance minister Yashwant Sinha expressed concern over the low level of mobilisation from the primary market. Referring to the lowering of interest rates on small savings, Sinha said the step was a signal for moving towards a low interest rate regime in the country.