National Securities Depository Limited (NSDL) is one of the largest Securities Depository introduced on November 8th, 1996. NSDL was launched with the intention to do away with paper-based trade settlement which was earlier an obligation. The NSDL securities are held in depository accounts. These financial assets can be traded in financial market. Some of the instruments that you can trade in are equity, common stocks, equity warrants, fixed income instruments, etc. Transactions under this organization are cost-effective and secured compared to certificates. Because of dematerialized (physical or non-physical certificates) format of securities, you can expect a quick turnaround for purchase and sell of shares, bonds, and other securities.
In this post, we will discuss about types of central depositories in India, Safety Measures Followed by the NSDL, services provided, benefits of NSDL, and frequently asked questions.
NSDL (National Security Depository Limited) and CDSL (Central Depository Services Limited) are the two central depositories in India. NSDL is the largest and the first depository in the country that was established on 8 November, 1996. It is promised by UTI (Unit Trust of India), IDBI (Industrial Development Bank of India), and NSE (National Stock Exchange). The purpose of it was to handle the dematerialized securities in the Indian capital market. The principal shareholders of this entity are mentioned below:
National Securities Depository Limited executes huge amount of transactions every day. Thus, the establishment takes different types of necessary safety measures for the depository system for investors holding. These cautions are given as below:
The NSDL services are grouped under 3 broad categories:
1) Basic Services: National Securities Depository Limited offers different services to brokers, security issues participating in Indian financial market, investors, banks, etc as per the provisions of Depositories Act. Any broker, intermediary, or investor who wish to subscribe to NSDL services, has to open a depository account with the Depository Participant. Now a depository account can be of 3 types such as Clearing member account, Beneficiary account, or Intermediary account. Services offered to these accounts are given below:
2) Value Added Services: NSDL offers other services such as pledge, hypothecation of securities, distribution of cash and non-cash benefits, automatic delivery of securities, stock lending, demat of warehouse receipts, demat of NSC/KVP, and much more. Below mentioned are a few important services the entity provides:
3) NSDL CAS (Consolidate Account Statement):
This is a statement for all investments held in joint or single name in the security market. The statement is also provided to sole or primary account holder of the investment account. It helps to keep a check on the investment portfolio. The subscribers can access their financial assets electronically as a part of single account. It also contains information on multiple financial instruments such as debentures, mutual funds, government securities held in demat form, investment in equity shares, money market instruments such as treasury bills, bonds, etc.
National Securities Depository Limited was put up with an intention to tackle the issue of securities’ ownership in physical form, and their transfers. The NSDL helps to hold the securities in dematerialized form rather and increases safety of the same, making it beneficial for traders/investors in following ways:
Here are the NSDL FAQs:
Subscribe to our newsletter
Akshar Blue Chip IT Park, 703, Thane - Belapur Rd, Turbhe, Navi Mumbai, Maharashtra 400705