National Securities Depository Limited
Encyclopedia
National Securities Depository Limited (NSDL), is the first central securities depository
in India
based in Mumbai
. It is promoted by institutions of national stature responsible for the economic development
of India and has established a national infrastructure of international standards that handles most of the securities held and settled in dematerialised form in the Indian 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. The enactment of Depositories Act in August 1996 paved the way for establishment of National Securities Depository Limited (NSDL), the first depository in India. It went on to established infrastructure based on international standards that handles most of the securities held and settled in de-materialised form in the Indian capital markets.
NSDL has stated it aims are to ensuring the safety and soundness of Indian marketplaces by developing settlement solutions that increase efficiency, minimise risk and reduce costs. NSDL plays a quiet but central role in developing products and services that will continue to nurture the growing needs of the financial services industry.
In the depository system, securities are held in depository accounts, which are similar to holding funds in bank accounts. Transfer of ownership of securities is done through simple account transfers. This method does away with all the risks and hassles normally associated with paperwork. Consequently, the cost of transacting in a depository environment is considerably lower as compared to transacting in certificates. In August 2009, number of Demat account
s held with NSDL crossed one crore
.
(UTI) - the largest mutual fund
in India and National Stock Exchange of India Limited (NSE) - the largest stock exchange in India. Some of the prominent banks in the country have taken a stake in NSDL.
Other Shareholders
Central Securities Depository
A Central Securities Depository is an organization holding securities either in certificated or uncertificated form, to enable book entry transfer of securities. In some cases these organizations also carry out centralized comparison, and transaction processing such as clearing and settlement of...
in India
India
India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...
based in Mumbai
Mumbai
Mumbai , formerly known as Bombay in English, is the capital of the Indian state of Maharashtra. It is the most populous city in India, and the fourth most populous city in the world, with a total metropolitan area population of approximately 20.5 million...
. It is promoted by institutions of national stature responsible for the economic development
Economic development
Economic development generally refers to the sustained, concerted actions of policymakers and communities that promote the standard of living and economic health of a specific area...
of India and has established a national infrastructure of international standards that handles most of the securities held and settled in dematerialised form in the Indian capital market.
History
Although India had a vibrant capital marketCapital market
A capital market is a market for securities , where business enterprises and governments can raise long-term funds. It is defined as a market in which money is provided for periods longer than a year, as the raising of short-term funds takes place on other markets...
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. The enactment of Depositories Act in August 1996 paved the way for establishment of National Securities Depository Limited (NSDL), the first depository in India. It went on to established infrastructure based on international standards that handles most of the securities held and settled in de-materialised form in the Indian capital markets.
NSDL has stated it aims are to ensuring the safety and soundness of Indian marketplaces by developing settlement solutions that increase efficiency, minimise risk and reduce costs. NSDL plays a quiet but central role in developing products and services that will continue to nurture the growing needs of the financial services industry.
In the depository system, securities are held in depository accounts, which are similar to holding funds in bank accounts. Transfer of ownership of securities is done through simple account transfers. This method does away with all the risks and hassles normally associated with paperwork. Consequently, the cost of transacting in a depository environment is considerably lower as compared to transacting in certificates. In August 2009, number of Demat account
Demat account
The term "demat", in India, refers to a dematerialised account for individual Indian citizens to trade in listed stocks or debentures in electronic form rather than paper, as required for investors by the Securities Exchange Board of India . In a demat account, shares and securities are held...
s held with NSDL crossed one crore
Crore
A crore is a unit in the Indian number system equal to ten million , or 100 lakhs. It is widely used in India, Bangladesh, Nepal, and Pakistan....
.
Promoters / shareholders
NSDL is promoted by Industrial Development Bank of India Limited (IDBI) - the largest development bank of India, Unit Trust of IndiaUnit Trust of India
Unit Trust of India is a financial organization in India.Unit Trust of India was created by the UTI Act passed by the Parliament in 1963. For more than two decades it remained the sole vehicle for investment in the capital market by the Indian citizens. In mid- 1980s public sector banks were...
(UTI) - the largest mutual fund
Mutual fund
A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors to buy stocks, bonds, short-term money market instruments, and/or other securities.- Overview :...
in India and National Stock Exchange of India Limited (NSE) - the largest stock exchange in India. Some of the prominent banks in the country have taken a stake in NSDL.
Other Shareholders
- Axis Bank Limited
- State Bank of IndiaState Bank of IndiaThe State Bank of India is the largest Indian banking and financial services company with its headquarters in Mumbai, India. It is state-owned. The bank traces its ancestry to British India, through the Imperial Bank of India, to the founding in 1806 of the Bank of Calcutta, making it the oldest...
- Oriental Bank of CommerceOriental Bank of CommerceOriental Bank of Commerce is an India-based bank in Lahore , is one of the public sector banks in India...
- CitibankCitibankCitibank, a major international bank, is the consumer banking arm of financial services giant Citigroup. Citibank was founded in 1812 as the City Bank of New York, later First National City Bank of New York...
NA - Standard Chartered BankStandard Chartered BankStandard Chartered PLC is a multinational financial services company headquartered in London, United Kingdom with operations in more than seventy countries...
- HDFC Bank Limited
- The Hongkong and Shanghai Banking CorporationHongkong and Shanghai Banking CorporationThe Hongkong and Shanghai Banking Corporation Limited is a prominent bank established and based in Hong Kong since 1865 when Hong Kong was a colony of the British Empire. It is the founding member of the HSBC Group and since 1990 is now a wholly owned subsidiary of HSBC Holdings plc...
Limited - Deutsche BankDeutsche BankDeutsche Bank AG is a global financial service company with its headquarters in Frankfurt, Germany. It employs more than 100,000 people in over 70 countries, and has a large presence in Europe, the Americas, Asia Pacific and the emerging markets...
- Dena BankDena BankDena Bank is one of the earliest banks in India headquartered in Mumbai.-History:* Dena Bank was founded by the family of Devkaran Nanjee under the name Devkaran Nanjee Banking Company Ltd....
- Canara BankCanara BankCanara Bank is a state-owned financial services company in India. It was established in 1906, making it one of the oldest banks in the country. As on 2009 November, the bank had a network of 3057 branches, spread across India...
- Union Bank of IndiaUnion Bank of IndiaUnion Bank of India is one of India's largest state-owned banks , is listed on the Forbes 2000. It has assets of USD 13.45 billion and all the bank's branches have been networked with its 1135 ATMs. Its online Telebanking facility are available to all its Core Banking Customers - individual as...
NSDL Facts & Figures
As on March 31, 2010- Number of certificates eliminated (Approx.) : 702 Crore
- Number of companies in which more than 75% shares are dematted : 2670
- Average number of accounts opened per day since November 1996 : 3646
- Presence of demat accountDemat accountThe term "demat", in India, refers to a dematerialised account for individual Indian citizens to trade in listed stocks or debentures in electronic form rather than paper, as required for investors by the Securities Exchange Board of India . In a demat account, shares and securities are held...
holders in the country : 80% of all pin codes in the country