The Securities and Exchange Board of India is expected to impose delivery on trades in Global Trust Bank stocks. It might even suspend trading altogether to prevent any price rigging in the scrip.
While no official word has come from the regulators, sources said Sebi is expected to take a decision on either suspending trading in the bank stock or put it in the "trade to trade segment" before market hours on Monday.
"I do not see any settlement risks or problems in pay in and pay out when trading commences tomorrow," said Sebi chairman, G N Bajpai. Sebi has also spoken to some bank chiefs to facilitate the opening of bank accounts for brokers and clients having accounts with GTB, said Bajpai. "They may also be given a line of credit from other banks," he added.
Meanwhile, both the National Stock Exchange and the Bombay Stock Exchange have assured the investor community that trading will be normal on Monday and that there would be no settlement problems.
There were some concerns since 20 brokers on the NSE and around 10 brokers on the BSE have accounts with GTB, which is also one of the clearing banks for the BSE.
NSE has already spoken to HDFC Bank to help out brokers having GTB accounts and fixed deposits standing as guarantees against their market exposure. "There is no need to disable any member or his account. If he needs additional exposure, he can go to another bank. We will give brokers time to get fresh guarantees," said Ravi Narain, managing director, NSE. He reassured investors that there will be no risk to settlement on Monday.
BSE in an official communication said: "The exchange is not anticipating any settlement problems as very few brokers have accounts with BSE."
The GTB stock closed marginally lower at Rs 13.17 on Friday on the BSE.
The demat accounts at the Global Trust Bank have not been frozen and will continue to function as normal. C B Bhave, managing director of National Securities Depository Ltd, said, "The RBI's decision will not affect the functioning of the demat account and the operations is expected to be normal."