The DNE option has been removed because of SEBI and not due to exchanges. So BSE isn’t going to cash settlement. Only the index derivatives on BSE are cash-settled, but so are on NSE.
The issue with DNE is that everyone with a strategy involving give-or-take delivery can get screwed if suddenly some positions don’t lead to give-or-take delivery because option buyers opted for DNE. Unlikely that the DNE option will be reintroduced.
Given that now the settlement of stocks and stock derivatives will happen at the same time, we are requesting SEBI/Exchanges to consider allowing regular trading activity in the post-market session between 3.40 pm to 4.00 pm, but only in the equity segment. Any option holder could buy stocks in that session to ensure that there is stock to deliver the next day when there is physical delivery of options. While we have a post-market session, it isn’t active, as all trading can happen only at the closing price. So usually, there isn’t enough liquidity if someone has to buy stocks, or there will be only buyers and no sellers.