Demat accounts allow investors to hold securities like stocks, bonds, and mutual funds in electronic form instead of physical certificates. Opening a demat account involves choosing a Depository Participant and submitting account opening documents. Demat accounts provide benefits like safe and convenient transfer of securities, reduction in paperwork, and risk elimination. National Securities Depository Limited and Central Depository Services Limited are the two depositories in India that work with Depository Participants like banks to provide demat services. Dematerialization is the process of converting physical securities like share certificates into electronic form in a demat account, while rematerialization is the reverse process of converting electronic securities back into physical form.

1. Introduction
Presented By
Arvind Shrivastav
TOPIC :- DEMAT ACCOUNT

2. History
 The history of the capital market in India dates back to the eighteenth century when East India Company
securities were traded in the country.
 At the end of the nineteenth century securities trading was unorganized and the main trading centers
were Bombay (now Mumbai) and Calcutta (now Kolkata).
 Trading was at that time limited to a dozen brokers; their trading place was under a banyan tree in front
of the Town hall in Bombay.
 India had a vibrant capital market which is more than a century old, the paper-based settlement of trades
caused substantial problems such as bad delivery and delayed transfer of title.
 To deal with this problem Depositories Act in August 1996 paved the way for establishment of National
Securities Depository Limited (NSDL) the first depository in India.
 In the depository system, securities are held in depository accounts, which are similar to holding funds
in bank accounts.

3. What is a Demat Account ?
DEMAT refers to Dematerialized account.
Dematerialization is the process of converting physical shares into
electronic format.
Investor surrenders his physical shares and in turn gets electronic shares in
his demat account.
An investor who wants to dematerialize his shares needs to open a demat
account with Depository Participant.

4. Features of a demat account
 DEMAT is a safe and convenient way to hold securities as it allows immediate transfer of securities.
 No need of stamp duty on transfer of securities.
 Purchase ,hold and sell of shares in electronic form.
 Change in address recorded with DP gets registered with all companies in which investor holds
securities electronically. Due to this the investor do not need to correspond with each of them
separately.
 Major reduction in paperwork involved in transfer of securities.
 Elimination the risks such as Bad delivery, loss of certificates, delay & theft.
 Automatic credit into DEMAT account of shares, arising out of bonus/split/consolidation/merger etc.

5. Steps involved for opening a Demat A/c
Choose a Depository
Participant (DP)
Fill DRF (Demat
Request Form)
provided by DP along
with the account
opening procedures.
Investor has to submit
the DRF to the DP
along with prescribed
documents.
DP opens the account
& provides the
investor with a unique
account no. which is
also known as
Beneficiary Owner
Identification Number
(BOID)
DOCUMENTS REQUIRED
Identity proof:-
 Aadhar card/Pan
card/Voter ID/ Driving
license/ Passport.
Address proof
 Telephone bill /
Electricity bill / Bank
statement not more than
3 months old / Bank
Passbook / Ration Card/
Passport / Voter Id Card.
 Passport size photos.
1
2
3

6. Demat Participants
Participants:-
Investor
Depository Participants
Depository
• National Securities Depository Ltd (NSDL)
• Central Depository Security India Ltd (CDSL)
BANK
NSDL
CDSL
INVESTOR
Depository

7. INVESTOR (Beneficial Owner)
 Beneficial owner is person in whose name a
demat account is opened with Depository for
the purpose of holding securities in the
electronic form.
 A beneficial owner can be :-
• Individual
• Partnership firm
• Hindu undivided family
• Company

8. Depository Participants (DP)
 Depository Participant will provide official procedure to open an demat account.
 Investor can hold his shares in these account.
 DP acts as an intermediary between the Depository & the Investor.
 A depository is similar to a bank. It holds shares, which belong to investors, in electronic
form.
 The investor has to open an account with the depository, through a Depository Participant.
DEPOSITORY
PARTICIPANTS
Acts as an intermediary.
Usually a bank or financial
institution
INVESTOR DEPOSITORY

9. National Securities Depository Ltd (NSDL)
NSDL was established on 8 November 1996 as the first electronic securities depository in
India.
It has established a national infrastructure using international standards that handles most of
the securities held and settled in dematerialized form in the Indian capital market
NSDL is promoted by Industrial Development Bank Of India (IDBI) and National Stock
Exchange Of India Ltd (NSE) & Specified Undertaking Of The Unit Trust Of India
(SUUTI)
National Securities Depository Limited (NSDL) had 1.50 crore investor accounts as per
Sept 2016 analysis.

10. Central Depository Security India Ltd (CDSL)
 CDSL was founded on February 1998.
 Central Depository Services Limited (CDSL), is the second Indian central
securities depository based in Mumbai.
 Its main function is the holding securities either in certificated or uncertificated
dematerialized form, to enable book entry transfer of securities.
 CDSL is promoted by Bombay Stock Exchange Limited(BSE), jointly with State
Bank Of India, Bank Of India, Bank Of Baroda, HDFC Bank, Standard Chartered
Bank, Axis Bank and Union Bank Of India.
 Central Depository Securities Limited (CDSL) had 1.15 crore investor
accounts as per Sept 2016 analysis.

11. Steps Involved In Dematerialization & Rematerialization process
Dematerialization process Rematerialization process
 Investors surrenders the physical certificate
to the DP for dematerialization.
 DP Informs the Depository about the
request.
 DP summits the certificates to the registrar
of the issuer company.
 Registrar communicates with the
Depository to confirm the request.
 Dematerialization of the certificates is done
by the registrar.
 Accounts are updated by the registrar and
the depository is informed about the completion
of dematerialization.
 Accounts are updated by the depository &
DP is informed about the same.
 Demat account of investor is updated by
DP.
 Investor makes a request of
dematerialization to the DP.
 DP Informs the depository about the
request.
 Depository confirms the request to the
registrar of the issuer company.
 Registrar updates accounts & prints
certificates for the investor.
 Accounts are updated by the Depository &
details are provided to the DP.
 Investors receives the certificate from the
registrar

12. comparison
Description of charges Private bank Public bank Multinational bank Cooperative bank
ICICI Bank Allahabad Bank Standard Chartered
Bank
Saraswat Bank
Account opening charges NIL NIL NIL NIL
Annual Maintenance
Charges
₹.700 p.a First Year :-
Nil
Second year Onwards :-
For Individuals:-
₹.150 p.a to ₹.300 p.a
For Non Individuals:-
₹.500 p.a for NSDL
₹.1000 p.a for CDSL
₹.600 p.a For Individuals:-
₹.400 p.a
For Non Individuals:-
₹.900 p.a for NSDL
₹.900 p.a for CDSL
Dematerialization
For each request form
Extra for each certificate
₹.50
₹.3
₹.50 + Mailing charges
₹.3
₹.35
₹.3
₹.25 + ₹.25 courier
charge
₹.3

13. comparison
Description of charges Private bank Public bank Multinational bank Cooperative bank
ICICI Bank Allahabad Bank Standard Chartered Bank Saraswat Bank
Rematerialization ₹.25 per certificate ₹.25 per certificate for
NSDL
₹.25 per certificate for
CDSL
₹.50 per certificate +
Depository charges
₹.25 per certificate + ₹.25
courier charge
Transfer Fee :- Buy
Market/Off Market
NIL NIL NIL NIL
Transfer Fee :- Sell
Market/Off Market
Instruction submitted
through:-
 Internet
 Call Centre
 At Branches
₹.30(Min)
₹.35(Min) ₹.25000(Max)
₹.40(Min)
₹.25 up to ₹.1 lac +
Ser. Tax
Additional ₹.5 for every
₹.5000 + Ser. Tax
0.05% of the market value
of transaction with a
minimum of ₹.25 per
transaction
0.04% of the market value
of transaction with a
minimum of ₹.21 per
transaction
Rejection/failure of
Transfer Instruction for
Delivery
₹.30 ₹.50 ₹.25 ₹.50

14. comparison
Description of charges Private bank Public bank Multinational bank Cooperative bank
ICICI Bank Allahabad Bank Standard Chartered
Bank
Saraswat Bank
Pledge creation per
instruction
₹.25 for NSDL
₹.12 for CDSL
₹.100 + Ser Tax 0.04% of the
transaction subject to
a minimum of ₹.50
₹.50
Pledge closure per
instruction
₹.35 to ₹.45 for NSDL
₹.12 for CDSL
₹.50 + Ser Tax 0.04% of the
transaction subject to
a minimum of ₹.50
₹.25
Additional Statement ₹.20 ₹.25 ₹.25 ₹.25
Closure of Account NIL NIL NIL NIL

15. CONCLUSION
Is Demat Account Necessary ?
 As per the Securities & Exchange Board of India (SEBI) guidelines all trades have to be settled in
dematerialized form only.
 Although SEBI has allowed trades of up to 500 shares to be settled in physical form.
 If you want to buy and sell shares through the stock exchange, in a easy & simple way they you must
have a demat account.

16. THANK YOU