Established in August 1996, The National Securities Depository Limited (NSDL) is one of the world's largest securities depositories. NSDL, a Market Infrastructure Institution (MII), is a key player in the nation's critical Capital Market Structure
Established in August 1996, The National Securities Depository Limited (NSDL) is one of the world's largest securities depositories. NSDL, a Market Infrastructure Institution (MII), is a key player in the nation's critical Capital Market Structure
- Although India had a vibrant capital market which is more than a century old, the paper-based settlement of trades caused substantial problems like bad delivery and delayed transfer of title, etc. The enactment of the Depositories Act in August 1996 paved the way for the establishment of NSDL. Using innovative and flexible technology systems, NSDL's vision is to bring Technology, Trust, and Reach to all the partners and players of the Indian capital market.
- The Indian economy is propelling at a much faster rate. The 1990s was a decade of significant change and transformation in India. This period witnessed economic liberalization, political developments, technological advancements, and cultural shifts. This decade also marked a crucial phase in the evolution of India's financial markets, which laid the foundation for the significant growth of the Indian Capital Market since then.
As we have witnessed creation of massive infrastructures like port, dams, hydel power etc, NSDL equally contributed to building a massive electronic infrastructure, which today holds securities value worth more than $4 Trillion. Following the introduction of the Depositories Act in 1996, NSDL commenced its operations in November 1996 and became India’s first and leading depository embarking on a transformative journey to change the landscape of India's financial markets. NSDL coined the word ‘demat’ and have since leveraged its technological infrastructure to cater the diverse needs of the securities market.
Business Partners Ecosystem
The NSDL ecosystem consist of Participant(DP), R&T Agents and the Clearing Corporation of Stock Exchanges, stock brokers etc.
Why Should You Choose NSDL?
NSDL as a security depository, provides a bouquet of services to investors, stock brokers, custodians, issuer companies, etc. through its nationwide network of Depository Partners. NSDL’s goal is to enhance reach, security, and efficiency across the ecosystem.
Business Partners Ecosystem
The NSDL ecosystem consist of Participant(DP), R&T Agents and the Clearing Corporation of Stock Exchanges, stock brokers etc.
Joining NSDL
We, at NSDL, work in collaboration with Participants (DPs), Stock Brokers, Issuer Companies, Registrar & Transfer Agents, and Clearing Corporations of Stock Exchanges. Collectively, they are referred to as Business Partners. Once integrated into NSDL's depository system, they offer a range of services to investors and clearing members. These Business Partners associate themselves with NSDL to leverage the array of benefits that the platform offers.
Depository Participants
A Depository Participant (DP) functions as a direct interface between investors and NSDL. DPs facilitate the opening of demat accounts for investors, hold their securities in electronic form, and manage transactions related to buying, selling, or transferring securities within NSDL.
Group Companies
NSDL has been a pioneering force in the Indian Capital Market since its inception. It has since created valued opportunities for all associated with the group. The NSDL comprises of the NSDL, NDML (NSDL Database Management Ltd) and the NSDL Payments Bank. While the NDML was set up in 2004 the NSDL Payments Bank came into operation in 2018. These group companies went on to develop and expand into associated groups across the country.
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Frequently Asked Questions
NSDL, is India first and largest Depository in the World, pioneered the dematerialization of securities in India. NSDL is the largest Depository in India in terms of number of issuers, number of active instruments, market share in demat value of settlement volume, and value of assets held under custody.
- NSDL achieved the milestone of having assets under custody (demat value of securities) of over ₹100,000 billion in June 2014 i.e. after 18 years of operations, with the next ₹100,000 billion assets under custody being achieved in November 2020, and thereafter added another ₹100,000 billion in December 2021. NSDL’s market share in total demat value is 88.4%.
- NSDL also held assets in custody aggregating to ₹43,060.50 billion for individuals (including NRIs) and Hindu Undivided Family (“HUF”) accounts, which constituted 71.79% of the total value of such assets under custody in dematerialized form as of March 31, 2023.
- Similarly, As of March 31, 2023, NSDL held assets in custody in relation to Non-Residents Indians aggregating to ₹2,725.62 billion, constituting 88.14% of the total value of such assets held by non-residents Indians under custody held in dematerialized form across depositories.
- NSDL’s market share was 97.84% in the value of listed Corporate Debt securities in custody aggregating Rs. 34,791.58 billion, as on March 31, 2023
- As of March 31, 2023, out of total securities which NSDL held, approximately 71.68% and 78.58% were equity securities in terms of quantity and value, respectively.
- The total Issuers registered with us to 40,987 aggregating to 67% of the market share. The market share by demat value of unlisted companies is 90%. The market share of FPI demat holdings is 99.9%.
- Dematerialization of Securities.
- Maintain Allotment & Transfer of Ownership Record using electronic book entries.
- Account Opening and Management for updating KYC, nomination facility & demographics details.
- Settlement of market and off-market transfers through Clearing Corporations.
- Corporate Actions such as dividends, bonus, payment of interest on Government Bonds/ SGBs.
- Pledge of securities including margin pledge enabling clients to avail themselves of loan or credit facilities.
- Consolidated Account Statement providing information of all securities in demat form.
- Non-Disposal Undertaking allows demat account holders to register NDUs in relation to loan obligations undertaken by corporate debtors.
A demat account holder is an individual or entity that opens and maintains a demat account for the purpose of holding and transacting securities in a dematerialized form. Demat account holders can buy and sell securities through their demat accounts. When purchasing securities, the securities are credited to their demat account, and when selling, the securities are debited from the demat account.
The investor obtains Depository / Demat Services through a DP of NSDL. A DP can be a Bank, Financial Institution, Custodian, Broker, or any entity eligible as per SEBI (Depositories and Participants) Regulations.
Issuer are entities or organization that offers or "issue" securities to investors. Securities issued by Issuers who have entered into an agreement with NSDL can be dematerialized in the NSDL depository.
Clearing Corporations play a crucial role in reducing counterparty risk, facilitating liquidity, and ensuring the orderly settlement of trades. All Clearing Corporations are electronically linked to the NSDL Depository System in order to facilitate the settlement of the trades done on the stock exchanges.
The Financial Kaleidoscope
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