Indian Stocks Beginner

CDSL vs. NSDL: What are the differences between them?


The government registers share depositories, such as NSDL and CDSL, with the market watchdog Securities Exchange Bureau of India (SEBI). What do these depositories do, and how do they work? Learn all about them with our brief explainer below.


A depository can be a company, bank, or other entity that facilitates security trading. (Central Depository Services Limited) (CDSL) and National Securities Depository Limited (NSDL) are the depositories of India’s most important stock exchanges: The National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE), respectively.

Although the two depositories are employed by separate exchanges, the transfers are free to use any of the deposits for the trading and clearance of shares and additional assets.

How do depositories work?

Depositories, like CDSL and NSDL, are entities that help financial institutions like exchanges and banks hold securities. They also support the trading of these securities. In other words, depositories equip the storage and transfer of money between parties, invest, and lend. By doing this, they lend security and liquidity to the market.

Depositories play a crucial role when a company has to pay dividends to its shareholders. Companies looking to pay out dividends will require shareholder details. In the past, an investor had to transfer a share certificate to sell shares to someone. You don’t need to do that now. All that’s required now is a simple transfer between Demat accounts. These Demat accounts are essentially “dematerialized” because they eliminate the physical certificate transfer. That’s where share depositories come in.

The NSDL and CDSL depositories are responsible for maintaining the Demat accounts we use for trading. You see, when you make a purchase, your Demat account receives credit, right? And it receives a debit when you sell your shares. But your shares are held by a depository all along. The Demat account is simply the middleman.

What is NSDL?

The majority of the securities held and settled in dematerialized form in the Indian capital market are handled by NSDL. NSDL, one of the largest depositories in the world, was founded in August 1996. Paper-based trade settlements in India at the time were creating significant issues, such as poor delivery and sluggish title transfers. The Depositories Act of 1996 tried to address these issues by creating NSDL.

The NSDL supported Indian brokers and investors by bringing in new technological solutions. Its solutions boosted efficiency, cut risk, and lowered costs. NSDL also ensured better security for Indian marketplaces. It did this by performing the following functions:

  • Allowing for the withdrawal and surrender of securities (dematerialization and materialization).
  • Maintaining investors’ holdings in electronic form and facilitating the transfer of assets.
  • Settling securities to make it easier to mortgage them as collateral for loans.
  • Enabling electronic crediting for shares in IPOs.

What is CDSL?

The second securities depository institution in India is called CDSL. CDSL was established in 1999. It stores a variety of securities—including shares and bonds—in an electronic format. The State Bank of India, Bank of Baroda, Axis Bank, HDFC Bank, Union Bank of India, and Standard Chartered all support CDSL, which works for the Bombay Stock Exchange.

CDSL has a number of functions to fulfill. The most important of them are:

  • Upkeep of Demat accounts
  • Realignment and dematerialization
  • The conclusion of deals
  • Transfers on and off the market
  • Account creation
  • Exchange of shares
  • Transfer or nomination
  • Distribution of corporate acts other than cash
  • Financial statement maintenance
  • Updating account information
  • Information about shareholders is shared with corporations
  • Information exchange for dividend payments

CDSL vs. NSDL: The differences between CDSL and NSDL

Although the operations of CDSL and NSDL are largely comparable, there are certain features that set these two depositories apart. The key differences are listed in the table below.




Stock exchangeBSE is responsible for CDSLNSE is responsible for NSDL’s dealings 
PromotersCDSL is primarily promoted by BSENSDL is promoted by IDBI bank, UTI, and NSE
Demat account formatCDSL’s Demat account numbers consist of 16 digitsNSDL Demat account numbers begin with “IN” followed by 14 digits
Number of depository participants registered599278

Therefore, the differences between NSDL and CDSL are primarily in relation to their

Therefore, the differences between NSDL and CDSL are primarily in relation to their promoters and account number forms. Both depositories share the same fundamental characteristics. They provide comparable services and operate similarly. A DP for both might be a bank, a broker, a custodian, or a financial organization. Any DP can allow you to create a Demat account.


CDSL and NSDL are depositories registered with the Indian government and subject to SEBI regulation. Similar investor services are provided by CDSL and NSDL. The depository you receive largely depends on the stock exchange you choose for trading.


How can I know the difference between CDSL and NSDL?

To differentiate CDSL and NSDL, consider their demat account format: CDSL accounts start with IN, while NSDL accounts begin with a unique identification number. Additionally, CDSL is promoted by BSE, whereas NSDL is independent.

Who owns the NSDL?

The National Securities Depository Limited (NSDL) is owned by a consortium of financial institutions and is headquartered in Mumbai, India.

Who is owner of CDSL?

Central Depository Services (India) Limited (CDSL) is a publicly listed company, so it is collectively owned by its shareholders, including individual and institutional investors.

What is CDSL in simple words?

CDSL, or Central Depository Services (India) Limited, is a financial institution that facilitates electronic holding, transfer, and trading of securities in India, acting as a central depository for stocks and other financial assets.

Can I have two Demat accounts?

Yes, you may. There are no legal restrictions on how many Demat accounts you can hold.

Can I have both NSDL and CDSL accounts?

Yes, you can have both, so long as you fulfill the KYC requirements.

How can I know if my Demat account is CDSL or NSDL?

Since all NSDL account numbers with “IN,” checking your account number is one of the easiest ways to know whether it is an NSDL account or not.

Can I transfer shares from CDSL to NSDL?

The transfer of securities from an account in one depository to one in another depository is termed an inter-depository transfer. Such transfers can be done only for securities available for dematerialization on both depositories.

Disclaimer: Risk is fundamental to the investment process in Indian stocks. Any discussion of securities in this article should not be considered a recommendation to buy or sell any security. The facts provided are for informational purposes only and should not be considered investment/financial advice from CoinSwitch.

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