A depository system allows investors to hold securities like shares, bonds, and government securities electronically rather than in physical form. There are two main depositories in India, NSDL and CDSL, which provide depository services through approved intermediaries called depository participants such as brokers. The depository system provides advantages like easy online trading, less paperwork, lower costs, and convenient transfers compared to holding physical securities. While both depositories and banks hold assets, depositories focus on keeping securities safe whereas banks focus on keeping money safe.

1. DEPOSITORY
SYSTEM

2. Meaning –
A Depository is an organization which holds
securities (like Shares, Debentures, Bonds, Government
Securities, etc.) of Investors in electronic form.

3. Concepts
 Multi-Depository Systems –
1) NSDL (National Securities Depository Ltd.)
2) CDSL (Central Depository Services Ltd.)
 De-Materialization –
Physical form A/c convert into Online form A/c
 Registered owner – Depository
 Beneficial owner – Investor
 Free transferability of shares

4. Depository Participant –
1) Depository provides its services to investors
through agents is called Depository Participants
(Dp’s).
2) These agent s are approved by depository with
approval of SEBI.
3) Examples – Sharekhan, Angle Broking, etc.

5. Advantages –
1) Easy Trading
2) Less paper work
3) Minimum cost
4) Transfer as per convenience
5) Online service
6) Save Time

6. DIFFERENCE BETWEEN DEPOSITORY &
BANK
Depository Bank
1) Securities Deposited 1) Fund Deposited
2) Securities Transfer 2) Fund Transfer
3) Depositories keep
safe securities
3) Banks keep safe
money

7. Thank You.