ICICI launches net trading, slashes brokerage rates

The site, which has 22,000 registrations so far, roughly takes two seconds to execute an order on a good internet connection. Margin-trading is also likely to be introduced in the next few months after a pilot on a select group of customers. "The margin product will be introduced after we arrive at a risk management process, after datamining and credit scoring," said Butch.

Future plans include launching a "mutual funds plaza where all the significant mutual funds would be offered", and entering into partnerships for offering online trading services through the site to non-resident Indians.

Butch did not reveal the target customer base for online trading but said E*Trade, an online brokerage in the United States, had 1.2 million customers, while Charles Schwab had nearly 2.4 million.

Housing Development Finance Corporation (HDFC) is following suit with the launch of its e-broking outfit — HDFC Securities soon, while IndustrialDevelopment Bank of India (IDBI) has initiated talks with Charles Schwab, E*trade and DLJ for the purpose. The term-lending institution will enter into internet trading through its subsidary IDBI Capital Market Services (ICMS).

ICICIdirect.com plans to introduce margin trading over the next few months. "Issues related to risk management have to be sorted out before commencingmargin trading," Puri Buch said.

Venturing into Web trading by financial institutions will make the going forconventional brokerages tougher. A few equity brokerages have already initiated order routing for investors through their e-trading sites.