That NSDL is now being split is a very positive development, but the finance ministry and the regulator most also ensure clear regulation and supervision of all non-depository businesses 

Sucheta Dalal

On 25th June, media reports said that the National Securities Depository Limited (NSDL), India’s first depository, is de-merging its e-governance business into a separate entity called the NSDL E-Governance Infrastructure Limited. Does this move merely signal NSDL’s ‘next phase’ of growth? Or is it a step towards, finally, cleaning up the warped regulation and supervision of the depository? In fact, with Gagan Rai, NSDL’s managing director, moving to the e-governance entity, the entire management team of 2006 will be out of the line of fire when Securities Appellate Tribunal has its final hearing on the IPO scam dispute. We need to go back in time to understand the implications of this move and the role of the finance ministry in botching up the regulation of this important market infrastructure institution.

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