What is CDSL, India’s largest registered share depository? Find out all you need to know!
On November 19, 2022, India's largest depository CDSL was disrupted due to a suspected cyber attack. The issue had been fixed by Sunday evening. But what exactly is CDSL and how does it affect you? Find out!
What is CDSL, India’s registered share depository? Find out all you need to know
On November 19, 2022, India's largest depository CDSL was disrupted due to a suspected cyber attack. The issue had been fixed by Sunday evening.
But what exactly is CDSL and how does it affect you?
Find out here!
An Introduction: What is a Depository?
- A Depository is like a bank account which enables the holding of securities in the electronic form and enables securities transactions to be processed by book entry in your Demat account.
- The Depository Participant (DP), who acts as an agent of the depository who offers depository services to investors. A DP will also assist you in buying or selling securities. The DP will provide you with a trading platform.
How does a Depository work?
- As per the SEBI guidelines, financial institutions, banks and stockbrokers, can take the authority as a DP.
- If you are the investor, you'll be known as the beneficial owner (BO).
- You'll have to open a demat account through any DP. When you purchase or sell some the credit and debit will take place in your Demat Account.
- The balances in your account will be recorded and maintained with CDSL and can be obtained through the DP.
- The DP will be required to provide you, at frequent periods, a statement of account which will provide you with the details of the securities holdings and transactions.
- The paper-based certificates system is no more and has been successfully eliminated by the depositary system. So now unlike the old times there is no risk of fake, forged and counterfeit resulting in bad deliveries.
How Does CDSL Help?
- The CDSL provides a valuable and timely transfer of securities.
- Initially CDSL was promoted by BSE Ltd. and subsequently joined with leading banks such as State Bank of India, Bank of India, Bank of Baroda, HDFC Bank, Standard Chartered Bank and Union Bank of India.
- The objective of setting up CDSL is providing convenient, dependable and secure depository services at affordable cost to all market participants.
What is CDSL?
- CDSL, or Central Depositories Services India Ltd, is the government-registered share depository, which along with the other state-owned counterpart National Securities Depository Ltd (NSDL) share depositories stores shares in an electronic or dematerialised form.
- CDSL enables secure transactions by playing a somewhat similar role to what banks play in handling cash and fixed deposits.
- Though banks help customers store their currency in electronic form the CDSL share depositories help consumers store shares in a dematerialised form.
Origin of CDSL
- CDSL was established in 1999.
- CDSL is led by its chairperson Balkrishna V Chaubal, who retired as Deputy Managing Director of State Bank of India, and its Managing Director & Chief Executive Officer Nehal Vora, a former Chief Regulatory Officer of BSE Limited.