What is NSDL & CDSL?
Last Updated: Mar -14-2018
A Depository facilitates holding of securities in the electronic form and enables securities transactions to be processed by book entry. The Depository Participant (DP), who as an agent of the depository, offers depository services to investors. According to SEBI guidelines, financial institutions, banks, custodians, stockbrokers, etc. are eligible to act as DPs. The investor who is known as beneficial owner (BO) has to open a demat account through any DP for dematerialisation of his holdings and transferring securities.
There are two organisations which provide these facilities: NSDL & CDSL.
NATIONAL SECURITIES DEPOSITORY LIMITED
National Securities Depository Limited (NSDL), is the first and largest depository in India and was established in August 1996. This depository has established a national infrastructure of international standard that handles most of the trading and settlement in dematerialised form in Indian capital market. In 2016, the total no of demat accounts in NSDL is 1.5 crores.
NSDL is promoted by Industrial Development Bank of India (IDBI), Unit Trust of India (UTI), and National Stock Exchange (NSE). Some of the prominent banks in the country have taken a stake in NSDL.
BENEFITS OF NSDL
- Elimination of bad deliveries
- Elimination of all risks associated with physical certificates
- Immediate transfer and registration of securities
- Faster settlement cycle
- Faster disbursement of non-cash corporate benefits like rights, bonus, etc.
- Reduction in brokerage by many brokers for trading in dematerialised securities
- Reduction in handling of huge volumes of paper
- Periodic status reports
- Elimination of problems related to change of address of investor
- Elimination of problems related to transmission of demat shares
- Elimination of problems related to selling securities on behalf of a minor
- Ease of portfolio monitoring
|Settlement Fee||Rs 4.50 per debit instruction|
|Pledge Creation||Rs 25 per instruction|
|Rematerialisation||Rs. 10 per certificate or Rs. 10 for every hundred securities or part thereof, whichever is higher|
NSDL REPORT: (As on January 2018)
|Client Accounts Active||16,865,433|
|Accounts having Debt instruments||933,791|
|Depository Participants (DP)||276|
|DP Service Centres||28,118|
|DP Geographical Coverage (Cities/Towns)||1,938|
|Demat Custody Quantity (mn. securities)||1,457,162|
|Demat Custody Value (Rs. Crore)||7,983,900|
CENTRAL DEPOSITORY SERVICE LIMITED
Central Depository Services (India) Ltd (CDSL), is the second Indian central securities depository. The depository system has effectively eliminated paper-based certificates which were prone to be fake, forged, counterfeit resulting in bad deliveries. CDSL offers an efficient and instantaneous transfer of securities.
- CDSL received the certificate of commencement of business from SEBI in February 1999.
- Settlement of trades in the demat mode through BOI Shareholding Limited, the clearinghouse of BSE Ltd., started in July 1999.
- All leading stock exchanges like the BSE Ltd, National Stock Exchange and Metropolitan Stock Exchange of India have established connectivity with CDSL.
BENEFITS OF CDSL:
- Wide DP network
- Online DP services
- Wide Spectrum of Securities Available for Demat
- Competitive Fees Structure
- On-line Information to Users
- Convenient to DPs
- Contingency Arrangements
- Meeting User's Requirements
- Regular Audit and Inspection
- Dormant Account Monitoring
- courteous helpline facility
CDSL demands only 500 INR per month from its DP for a CM account per exchange again 5.50 INR will be payable per credit transaction into CM principle amount from the Clearing Corporation.
|Monthly Transaction||Rate per debit transaction|
|More than 15 lakhs (INR)||Rs.4.25|
|More than 4 lakhs (INR) & up to 15 lakhs (INR)||Rs 4.50|
|More than 1lakhs (INR) & up to 4 lakhs (INR)||Rs. 5.00|
|Upto 1 lakh (INR)||Rs 5.50|
CDSL REPORT: (As on January 2018)
|Client Accounts Active||1,44,15,675|
|Accounts having Debt instruments||14,625|
|Depository Participants (DP)||592|
|No. of branches with LIVE connectivity||209|
|No. of cities/towns with LIVE connectivity||103|
|No. of locations with LIVE connectivity||293|
|Demat Custody Quantity (mn. securities)||2,72,332|
|Demat Custody Value (Rs. Crore)||2,16,64,805|
If you are proceeding to open a demat account and invest in the stock market, then you must know about these two entities. Some people get confused because both the organisation provide the same kind of facilities.
- whatever an investor buys from the company through a stockbroker that could be bonds, shares or debentures are credited to your demat account by the depository automatically and when you sell, they are debited from your account by the depository.
- In short, NSDL & CDSL are in charge of your shares and stocks you hold in your Demat account.
- All the stock broker need to link their DP with one of the two, either NSDL or CDSL.
- As every bank protects your money and converts it in electronic format, NSDL & CDSL protects your shares and securities in the same method.
Therefore, you can open account with any stockbroker. Also, you don't have to worry about your investment because it is fully secured with either NSDL or CDSL. The only difference the two depositories have is the prices and big Financial Institutions who back them.