ICICI to launch first e-broking service

MUMBAI, SEPT 1: The ICICI group will launch the first online broking system in the country on December. The system will enable investors ...

MUMBAI, SEPT 1: The ICICI group will launch the first online broking system in the country on December. The system will enable investors to buy and sell shares through the internet on the lines of what e-brokerages like Charles Schwab are currently offering in the United States.

In the first phase, it would be available only for trading on the National Stock Exchange, ICICI Bank senior vice-president Neeraj B Bhai told The Indian Express after a presentation at the quot;e.biz India 8217;99quot; show. The service is most likely to be launched by ICICI Securities and Finance Company which has 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 issuesinvolved 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 investor8217;s account is debited or credited online. As an added precaution, investors will not be allowed to take positions higher than their deposit amount.

Until recently, Department of Telecommunications regulations did not permit the exchange trading network to be connected to the internet. With this hurdle now removed, 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 transactions with credit cards because the user8217;s credit card number will remain hiddenfrom 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 checks for the number8217;s validity and credit limit and sends a confirmation to the merchant. The bank is currently working with Visa and Mastercard to the make this possible. quot;Customers are more willing to trust a bank rather than a merchant,quot; Bhai said.

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This project is expected to go live only after March 2000 because the bank needs a software component from Visa and Mastercard which allows access to their data for verification. ICICI also has plans to launch its own credit card after March 2000.

The investment needed for the payment gateway and the e-broking system will be higher than what Infinity required.

ICICI Infotech

MUMBAI: ICICI Infotech a wholly-owned subsidiary of ICICI, has taken over Rohan Software Pvt Ltd, a company focussed on software consultancy and development for the banking industry. The company had assets worth Rs34 lakh with a net income of Rs 18 lakh. With the acquisition of Rohan Software, ICICI Infotech expects to complement its recent foray into providing software solutions to the banking industry.