Demat Account FAQ | FAQs on Demat Account
Dematerialisation is a process to convert your physical holdings (paper form) into electronic form.
Rematerialisation is a process to convert your electronic holdings back to physical holdings (paper form).
KYC is an abbreviation for Know Your Customer (KYC) through which the bank will know who the customer is, his identity, his address and his financial status.
A Depository is just like a bank, the difference is that here your securities are held in electronic form instead of money. Depository is an organisation which holds securities (like shares, debentures, bonds, government securities, mutual fund units etc.) of investors in electronic form at the request of the investors through a registered depository participant.
There are two Depositories in India which are National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL).
Depository Participant (DP) can be described as an Agent of the depository. It is an intermediary between the depository and the investors. Under the Depositories Act, investors can use the services of these Depositories through Depository Participants (DP). A DP can be a bank, financial institution, a broker, or any entity eligible as per SEBI norms and is responsible for the final transfer of shares from the depository to investors.
Beneficial Owner is a person, who is opening a Demat Account in his/ her name with a depository, i.e. NSDL or CDSL, for the purpose of holding securities in the demat/ electronic form and whose name is recorded with that depository.
Yes, you will get the Corporate Benefits like bonus and rights issues directly credited to your demat account in an electronic form.
Yes, you will receive mobile / email alerts on your registered mobile/ email address for all the important transactions made in your demat account directly from NSDL / CDSL on the same day.
Pledge is a process of pledging shares in your demat account in order to obtain a loan. Its processing is much faster than in the case of physical shares. If the investor decides to pledge any securities in his demat account, he can do of the same by submitting the pledge request form duly completed, to his DP.
For the purpose of working capital limit, MUDRA has launched a new product called "MUDRA Card", which is a Debit card issued on RuPay platform, and provides hassle free credit in a flexible manner.
It is a pre-loaded card that will enable the borrowers to buy raw material, heavy and light machinery for their business on an online platform.
Nomination in a demat account is permissible only to the individuals holding beneficiary accounts either singly or jointly. Non-individuals such as society, trust, body corporate, partnership firm, Hindu Undivided Family (HUF), etc. cannot nominate.
Transmission of securities is a facility for transmission of balance of securities held in a demat account to another demat account on the occasion of death, lunacy, bankruptcy, insolvency or required due to operation of any law.
Yes, you can open more than one account as there is no restriction on the number of accounts you can open and maintain.
No. The depository does not prescribe any minimum balance. You can have zero balance in your account.
Yes. You can change/ update the bank details in your demat account. It is always good to keep your bank details up-to-date in your demat account as in depository system, monetary benefits on your security balances are directly credited into the bank account as per the details provided by you in your demat account with DP.
In a demat account 'Receipt in' form has to be submitted to receive securities in the account.
No. The demat account cannot be operated on "either or survivor" basis. All the holders need to sign the transaction slip in order to processing of any transaction.
No. Names of the account-holders cannot be added or deleted or changed. Still, if you want to add / delete/ change name of an account-holder, you are required to open a new account in the desired holding pattern and transfer the securities to the newly opened account.
Yes, you can register a Power of Attorney (POA), allowing another individual to operate your Demat account. The POA should be KYC compliant. A notarised copy the POA is to be submitted, including the signature of the Donor and Donee along with a consent letter.
Yes. If you authorise any person to operate your account by executing a power of attorney and submit it to your DP, that person can operate the account on your behalf.
You can close your demat account by submitting a demat account closing form signed by all account holders to the Depository Participant (DP).
No. In case, there is any holding/ security in your demat account, it should be transferred before demat account closure, otherwise your account closure request will be rejected by the Depository Participant (DP).
ISIN (International Securities Identification Number) is a unique 12 digit alphanumeric identification number allotted for a security (e.g.- INE383C01018). Equity fully paid up, equity-partly paid up, equity with differential voting /dividend rights issued by the same issuer will have different ISINs.
A Registrar and Transfer Agent (RTA) is an agent of the issuer. RTA acts as an intermediary between the issuer and depository for providing services such as dematerialization, rematerialization, initial public offers (IPO) and corporate actions like dividend, bonus, rights issue, split, etc.
Yes. Demat account can be opened in the name of a minor. The account will be operated by a guardian till the minor becomes major. Guardian has to be the father or in his absence mother. In absence of both, father or mother, the guardian can be appointed by court.
No. Minor cannot be a joint holder in a demat account.
No. In the case of HUF, shares can be held in the name of existing Karta on behalf of HUF.
No permission is required from RBI to open a demat account.
Any transaction involving delivery of securities to a clearing corporation / Clearing House for sale of securities done on a stock exchange platform is termed as "On Market" transaction.
A transaction which is settled directly between two persons where Clearing Corporation / Clearing House is not involved, is called an "Off Market" transaction.
Transfer of securities from an account in one depository to an account in another depository is termed as an inter-depository transfer.
In case, you purchase or sell the shares the same is credited or debited from your demat / Trading account T+2 settlements.