The Bombay Stock Exchange today said it has effected a 90-per cent reduction in the deposit amount for new members with immediate effect. The bourse's move comes within days of its rival exchange MCX-SX meeting regulatory norms for launching an equity bourse.
"The BSE has decided to reduce the deposit amount for new deposit-based membership from the existing Rs 100 lakh to Rs 10 lakh with immediate effect," the oldest bourse in Asia said.
Under the new plan, membership can be obtained by paying Rs10 lakh towards deposit instead of the existing Rs1 crore. Additionally, new members would need to pay only Rs1 lakh upfront against Rs 5 lakh earlier.
According to analysts, the BSE has been taking various steps to close the gap with its rival and its latest move comes at a time when stock markets are ruling strong, a rebounding economy and bullish foreign institutional investors putting in huge amounts of money.
The move would encourage more individuals, corporate houses and partnerships to take up membership, they say.
The BSE said not only has it slashed the membership deposit it has also relaxed other fees that new members had to pay.
Relaxation in the base minimum capital requirement has also been introduced and though this remains at Rs10 lakh earlier it had to be maintained in cash only. The bourse now says it would allow Rs1.25 lakh in cash and Rs8.25 lakh in cash equivalents.
Madhu Kannan, managing director and CEO of the bourse said by offering the exciting pricing scheme, the bourse intends to make it affordable to all aspiring for BSE membership. He added that the bourse hoped the new scheme would generate a good response from the market participants, building and expanding its existing membership base to promote financial inclusion.