• Mon. Jun 24th, 2024

What is the CDSL and NSDL? What is the Difference Between them?

BySrishty Verma

Dec 29, 2022

What is NSDL ?

NSDL, or the National Securities Depository Limited, is the central depository for securities in India. It is a public limited company that was set up by the Securities and Exchange Board of India (SEBI) in August 1996. NSDL holds securities in dematerialized form and provides services related to depository, registry, and corporate actions.

NSDL also plays an important role in the Indian capital markets by providing custody and other related services to participants. In addition, NSDL provides a platform for paperless trading of securities on the stock exchanges.

NSDL has a network of over 2000participating members, including banks, financial institutions, corporates, and stockbrokers. It also has a wide range of services for retail investors, including e-investing, e-voting, and e- settled mutual fund schemes.

The role of NSDL in the Indian capital markets is crucial, and it is constantly innovating to meet the evolving needs of market participants.

Padmaja Chunduru is the head and CEO of the National Securities Depository Limited. NSDL provides code is a 14-digit numeric code that starts with IN. 

The process of opening NSDL demat account is very easy and simple steps to follow:

  1. First, we need to get in touch with a depository participant that is registered the NSDL.
  2. We required to complete the KYC (Known Your Customer), this includes submitting the requisite application form duly filled along with a copy of PAN card, address proof, and your bank account detail to the DP.
  3. Once all the relevant documents are received by the DP, they will be subject to verification.
  4. After successful verification of the same, the DP can easy open demat account with NSDL.
  5. Just after opening the account, we have to submit all related details to account. Such as DP Id, Client Id, a copy of Client Master Report, tariff sheet, and a copy of the Rights and Obligations of Owner and Depository Participant.
  6. In addition to this, DP would also provide you with the NSDL demat account login credentials, which you can then use to Log into your NSDL demat account.

Just by following few steps we can easily view our NSDL D-mat account after downloading NSDL Speede App.

The promoters of NSDL’s are Industrial Development Bank of India (IDBI), Unit Trust of India (UTI) and National Stock Exchange (NSE).

The goal of NSDL, according to their official website, is to “ensure the safety and soundness of Indian Marketplaces by providing settlement solutions that promote risk minimization and lower cost.” It saves a lot of time because everything is handled digitally.

Benefits of having NSDL Demat Account are following under: –

  1. There are no chances of bad deliveries because they can easily examine the quality of assets.
  2. There is no risk of destruction, theft, damage, or elimination of physical certificate risk.
  3. There is elimination of stamp duty.
  4. Immediate transfer and registration of securities.
  5. They offer faster settlement and more liquidity.
  6. It is all managed and done by digitally that’s why it reduced the paperwork.
  7. Statement detailing transactions and holding are provided regularly.

What is CDSL ?

CDSL Stands for Central Depositories Services Limited, CDSL is the second Indian central securities depository based in Mumbai. It was founded in February 1999. It facilitates holding and transacting in securities in the electronic form and facilitates settlement of trades done on stock exchange.  It’s a security that includes equities, debentures, bonds Exchange traded funds (ETFs), units of mutual funds and etc. Shri Nehal Vora is the Managing Director and Chief Executive Officer of the Central Depositories Services (India) Limited. CDSL demat account number is 16-digit numeric code.

We can easily begin the CDSL EASIEST registration process by following few steps: –

  1. Log on to the website of CDSL and click to the register online tab on the homepage. From there select EASIEST from the list of options.
  2. We have to enter our DP Id followed by our BIO Id. Then they ask for phone number and email id to receive a one Time Password (OTP) on registered number or mail id.
  3. Enter the OTP received to verify our phone number.
  4. Once we enter our account details, the portal will ask us to select the type of account.
  5. Trusted Account transfers: – By using this option, it allows us to transfer securities to any other 4 demat accounts register with CDSL that we trust.
  6. Account of choice transfer: – This option allows us to transfer securities to any other demat account.  Transaction needs to be verified using a digital signature.
  1. In case we have selected Trusted Account, we need to enter the BO number of the account that we wish to transfer securities.
  2. The next option is Grouping. in case we have CDSL registered accounts with other brokers, these can be added here. If we don’t have such accounts, then we can skip this step.
  3. Once we finish the CDSL EASIEST registration processes is complete. It hardly takes 24 to 48 hours to get activated account.

Benefit of having CSDL Accounts are as following under: –

  1. CDSL offers any time access to our demat account.
  2. if we have multiple demat accounts with CDSL, we can access all of them under a single roof with one login. (Just single point login)
  3. they also offer online transfer of securities through CDSL EASIEST.
  4. They also provide transactions that we can make through CDSL EASISET are safe, secure and encrypted. Even they provide the transfer of securities only be made after multiple checks.

Honestly, it is said that in terms of service to investors, there is no key difference between having a Demat account with a DP registered either with NSDL or CDSL, because they both are regulated by SEBI and provide almost similar investment and trading services. I can only difference between both of them are the depositories is their operating marketing system.

I hope above information is helpful for all my viewers but still if you have any related doubt, please visit government official website.

What is the different between NSDL and CDSL

Different types of securities can be traded in each system. NSDL deals in Equity, Derivatives, Currency, Commodity while CDSL deals in only Equity and Derivatives. NSDL provides an online platform that can be used by all types of investors while CDSL provides a physically settled trading platform. NSDL charges an annual custody fee while CDSL does not have any such fee.

The main aim of establishing NSDL was to develop a central securities depository in the country that would cater to the needs of all the participants of the securities market. The main aim of CDSL was to provide a convenient and secure system for holding and transferring securities in an electronic form.

Both NSDL and CDSL are important players in the Indian securities market. They offer different platforms for trading securities and cater to the needs of different types of investors. Each has its own advantages and disadvantages.

It is important to understand the different features of each platform before deciding which one to use.

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