About the National Securities Depository Limited
The National Securities Depository Limited (NSDL) is one of the largest depositories of the world. It was established in 1966 and has been handling the transactions regarding dematerialized securities ever since. It is governed by the Depositories and Participants Regulations 1996 and the bye laws and rules under it. NSDL is located in Mumbai, India.
Purpose of NSDL
NSDL seeks to develop efficient solutions to increase efficiency and safety of the settlement process in the capital market system. It plays a central role in developing products that will nurture the needs of the financial services industry.
Who Forms the Promoters and Investors in NSDL?
The promoters of NSDL are Industrial Development Bank of India (IDBI), Unit Trust of India (UTI), and National Stock Exchange (NSE). The principal shareholders of NSDL are State Bank of India (SBI), HDFC Bank, Dena Bank, Oriental Bank of Commerce, Axis Bank Limited, Canara Bank, Deutsche Bank, HSBC, Citibank and Standard Chartered Bank.
Who forms the Clientele of NSDL?
NSDL provides services to investors, custodians, stock brokers, issuer companies etc. through its extensive network of Depository Partners.
What are the Services that NSDL Offers?
The list of services that NSDL has to offer are – opening, nomination, maintenance and transmission of demat accounts, dematerialisation and dematerialization of accounts, transfer of shares either on market or off-market, distribution of non-cash corporate benefits to the investors, trade settlement etc.
What are Benefits of Functioning Within the NSDL Framework?
NSDL provides numerous direct and indirect benefits such as – Elimination of bad deliveries that will invite objections from the receiver. Elimination of risks of theft, mutilation, loss associated with a physical certificate. Immediate transfer and registration of securities is guaranteed. Easy access to periodic reports on investments and transactions made allowing the investor to monitor his or her portfolio meticulously. Ensures that there is a faster settlement cycle improving the liquidity of the investor. Ensure that there is faster disbursement of non-cash benefits.
Difference Between NSDL and CDSL
While both the CDSL and NSDL are depositories incorporated by the Securities Exchange Board of India, there are a number of differences that exist between the two. They are follows – National Securities Depository Ltd. - Stock exchange that the depository works for - National Stock Exchange - Establishment year - 1996 - Has lesser participants and investors in comparison to CDSL. - Demat account number format - 16-digit alphanumeric number. Account number begins with ‘IN’ followed by 14 numeric digits
Central Depositories Services Ltd. - Stock exchange that the depository works for - Bombay Stock Exchange - Establishment year - 1999 - Has more participants and investors in comparison to NDSL. - Demat account number format - It has a 16-digit demat account.
