On November 19, 2022, India’s largest depository CDSL was disrupted due to an alleged cyber attack. The problem was fixed on Sunday night. But what exactly is CDSL and how does it affect you? Discover!
What is CDSL, India’s Registered Share Depository? Find out everything you need to know
On November 19, 2022, India’s largest depository CDSL was disrupted due to an alleged cyber attack. The problem was fixed on Sunday night.
But what exactly is CDSL and how does it affect you?
Discover it here!
Introduction: What is a depository?
- A Depositary is like a bank account that allows holding of securities in electronic form and allows securities transactions to be processed through book entries in your Demat account.
- The Depository Participant (DP), which acts as an agent of the depositary offering depository services to investors. A DP will also help you buy or sell securities. The DP will provide you with a trading platform.
How does a Depository work?
- As per SEBI guidelines, financial institutions, banks and stockbrokers can take over the authority as DPs.
- If you are the investor, you will be known as the beneficial owner (BO).
- You will have to open a demat account through any DP. When you buy or sell something, the credit and debit will be done in your Demat account.
- Your account balances will be recorded and maintained with CDSL and may be obtained through the DP.
- The DP must periodically provide you with an account statement that will provide details of securities holdings and transactions.
- The paper certificate system no longer exists and has been successfully eliminated by the deposit system. So now, unlike the old days, there is no risk of fakes, counterfeits or forgeries resulting in poor deliveries.
How does CDSL help?
- The CDSL provides a valuable and timely transfer of securities.
- Initially, CDSL was promoted by BSE Ltd. and later joined hands with leading banks like State Bank of India, Bank of India, Bank of Baroda, HDFC Bank, Standard Chartered Bank and Union Bank of India.
- The objective of establishing CDSL is to provide convenient, reliable and secure depository services at an affordable cost to all market participants.
What is CDSL?
- CDSL, or Central Depository Services India Ltd, is the government-registered share depository, which along with other state-owned share depositories, National Securities Depository Ltd (NSDL), stores shares in electronic or dematerialized form.
- CDSL enables secure transactions by playing a role somewhat similar to that played by banks in handling cash and fixed deposits.
- While banks help customers store their currency in electronic form, CDSL share depositories help consumers store shares in dematerialized form.
Origin of CDSL
- CDSL was founded in 1999.
- CDSL is led by its chairman Balkrishna V Chaubal, who retired as deputy managing director of State Bank of India, and its managing director and chief executive officer Nehal Vora, former regulatory director of BSE Limited.
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Source: ptivs2.edu.vn