The depositories have an important role in the world of investment, just as we need a bank account to keep money safe, in the same way, an account is needed to keep bonds, companies shares, market securities, etc. Which we know by the name of depository (Demat)
There are only two depositories in India, about which we will discuss today.
- NSDL (National security depository limited)
- CDSL (Central Depository services limited)
When we sell our securities like share and bonds they are automatically debited from the depositories and when we buy them they are automatically credited by the depositories.
Headquarter Location- Mumbai
- CDSL is a financial organization that is used as a security purpose and holds the stock debentures, bonds, etc in the form of physical or digital.
- In India, two depositories are available, the first one is NSDL and second one is CDSL
- CDSL established in February 1999
- CDSL was initially promoted by BSE
- Depositories participants are the agents of depositories acts as a mediator between depository and investor
- At this time, the total number of investor accounts with CDSL is about 2.23. is
- CDSL is promoted by the SBI, Bank of Baroda, Bank of India, HDFC Bank, Standard Charted Bank, Axis Bank, and union bank of India
CDSL has three subsideries
- CDSL Ventures limited
- CDSL insurance repository limited
- CDSL commodity repository limited
CDSL Ventures Limited-
- CDSL venture ltd is a subsidiary of CDSL which provides service to mutual funds, share market and insurance by e-KYC
- CDSL Venture Limited has established electronic connectivity with both NSDL and CDSL and equipped its infrastructure to handle RTA activities.
- RTA is known as a registrar and transfer agent.
- RTA is used to transfer market securities from one Demat to another.
CDSL Insurance repository limited-
- CDSL Insurance Repository Limited is a wholly owned subsidiary of CDSL which is used for security of insurance. CDSL Insurance Repository Limited is a wholly owned subsidiary of CDSL which is used for security of insurance.
- CDSL IR has received a Certificate of Registration from IRDAI (Insurance Regulatory and Development Authority of India) on 29 April 2011 to act as a Repository under the Insurance Repository and Electronic Policy Issuance Guidelines.
CDSL commodity repository limited-
CDSL Commodity Repository Limited provides institutional financial services. The company provides commodity exchange, on and off market trading, services. CDSL Commodity Repository Limited serves only in India customers.
how cdsl makes money-
Cuddles is a diversified company whose earning source is given below.
- From Demat account annual maintenance charge- 35%
- Online data charge- 16%
- IPO maintenance- 10%
- Document storage- 3%
- E-voting- 3%
- Ecas- 4%
- Others- 9%
Headquarters Location– Mumbai
Founded- 8 Aug. 1996
NSDL is a financial organization that is used as a security purpose and holds the stock, debentures, bonds, etc in the form of physical or digital certificates.
- The oldest depository in the country (India) is NSDL, which was established in 1996.
- NSDL is promoted by IDBI, UTI, and NSE (National Stock Exchange)
- NSDL is followed by NSE to hold the share.
- When we buy and sell any shares on the NSE exchange, then NSDL Depository is used for it.
How Depositories Work-
To buy or sell any product, two people are required, in which one is the buyer and the other is the seller, similarly two Demat accounts are required to buy or sell the shares of a company. In both of these, there is a place order to buy one and another one place order to sell them, then the company’s share is transferred from one Demat account to another Demat account.
When a company has to distribute the dividend, it collects the bank details of the investor who invested in the company, through the depository, with the help of which it is able to give the dividend to the investor.
List of service provided by CDSL/NSDL
- Trade settlement
- Share transfer
- Market and off-market transfer
- Distribution of non-cash corporate action
- Account statement
- Changing account details
- Rematerialisation and dematerialization
- Maintenance of Demat account
The work of both CDSL and NSDL depositories is the same, so in both it will be difficult to say who is the best.
Difference between CDSL and NSDL
|1||Briefs||National securities depository limited||Central depositories services limited|
|2||Stock Exchange||National stock exchamge||Bombay stock exchange|
|3||Investor account||1.95 Cr.||2.11 Cr.|
|4||Demat account number format||16-digit alpha numeric number. Account number begins with ‘IN’ followed by 14 numeric digits||16-digit Demat account number|
|5||Number of depository participants registered||278||599|
If you need a Damat account, you can open it by clicking on the link given below
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