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.<\/p>\n\n\n\n
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\u2019s most important stock exchanges: The National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE), respectively.<\/p>\n\n\n\n
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.<\/p>\n\n\n\n
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.<\/p>\n\n\n\n
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\u2019t need to do that now. All that\u2019s required now is a simple transfer between Demat accounts. These Demat accounts are essentially \u201cdematerialized\u201d because they eliminate the physical certificate transfer. That\u2019s where share depositories come in.<\/p>\n\n\n\n
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.<\/p>\n\n\n\n
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.<\/p>\n\n\n\n
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:<\/p>\n\n\n\n
The second securities depository institution in India is called CDSL. CDSL was established in 1999. It stores a variety of securities\u2014including shares and bonds\u2014in 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.<\/p>\n\n\n\n
CDSL has a number of functions to fulfill. The most important of them are:<\/p>\n\n\n\n
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.<\/p>\n\n\n\n <\/p>\n <\/span><\/i><\/p>\n<\/td> Therefore, the differences between NSDL and CDSL are primarily in relation to their<\/span><\/p>\n\n\n\n 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.<\/p>\n\n\n\n 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.<\/p>\n\n\n\n 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.<\/p>\n\n<\/div>\n<\/div>\n The National Securities Depository Limited (NSDL) is owned by a consortium of financial institutions and is headquartered in Mumbai, India.<\/p>\n\n<\/div>\n<\/div>\n Central Depository Services (India) Limited (CDSL) is a publicly listed company, so it is collectively owned by its shareholders, including individual and institutional investors.<\/p>\n\n<\/div>\n<\/div>\n 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.<\/p>\n\n<\/div>\n<\/div>\n Yes, you may. There are no legal restrictions on how many Demat accounts you can hold.<\/p>\n\n<\/div>\n<\/div>\n Yes, you can have both, so long as you fulfill the KYC requirements.<\/p>\n\n<\/div>\n<\/div>\n Since all NSDL account numbers with \u201cIN,\u201d checking your account number is one of the easiest ways to know whether it is an NSDL account or not.<\/p>\n\n<\/div>\n<\/div>\n 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.<\/p>\n\n<\/div>\n<\/div>\n<\/div>\n<\/div>","protected":false},"excerpt":{"rendered":" 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. NSDL and CDSL A depository can be a company, bank, or other entity that facilitates security […]<\/p>\n","protected":false},"author":93,"featured_media":32677,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_ayudawp_aiss_exclude":false,"footnotes":""},"categories":[10644,7362],"tags":[11088,11091,11085],"class_list":["post-31084","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-indian-stocks","category-personal-finance","tag-cdsl","tag-demat-accounts","tag-nsdl"],"acf":{"json_ld_schema":"\n[{\"@context\":\"https:\/\/schema.org\",\"@type\":\"FAQPage\",\"@id\":\"https:\/\/coinswitch.co\/switch\/indian-stocks\/pe-ratio-definition-formula-and-calculation\/#FAQPage\",\"headline\":\"What Is PE Ratio & How To Calculate It? - CoinSwitch\",\"keywords\":\"PE ratio, profitable investing, \",\"datePublished\":\"2023-02-07T18:29:15+05:30\",\"dateModified\":\"2023-02-21T22:45:35+05:30\",\"dateCreated\":\"2023-02-07T18:29:15+05:30\",\"author\":{\"@type\":\"Person\",\"name\":\"Anju Christine\",\"description\":\"Anju Christine currently spends most of her days editing, but forays into writing on occasion. Although a reluctant writer in recent times, she has spent years trying to learn the craft and is now keen to use it to speak to those curious about crypto.\",\"url\":\"https:\/\/coinswitch.co\/switch\/author\/anju-christine\/\",\"sameAs\":[],\"image\":{\"@type\":\"ImageObject\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/3b7c1ed4384b22be3c3e77f5b9ba3000?s=96&d=mm&r=g\",\"height\":96,\"width\":96}},\"image\":[{\"@type\":\"ImageObject\",\"@id\":\"https:\/\/coinswitch.co\/switch\/indian-stocks\/pe-ratio-definition-formula-and-calculation\/#primaryimage\",\"url\":\"https:\/\/coinswitch.co\/switch\/wp-content\/uploads\/2023\/02\/PE-ratio-Definition-formula-and-calculation.jpg\",\"width\":\"1800\",\"height\":\"1080\"},{\"@type\":\"ImageObject\",\"url\":\"https:\/\/coinswitch.co\/switch\/wp-content\/uploads\/2023\/02\/PE-ratio-Definition-formula-and-calculation-1200x900.jpg\",\"width\":\"1200\",\"height\":\"900\"},{\"@type\":\"ImageObject\",\"url\":\"https:\/\/coinswitch.co\/switch\/wp-content\/uploads\/2023\/02\/PE-ratio-Definition-formula-and-calculation-1200x675.jpg\",\"width\":\"1200\",\"height\":\"675\"}]}]\n","json_ld_custom_schema":"","key_takeways":false,"youtube_vodeo_url":"","seo":{"title":"","keywords":"","description":"","canonical":""},"blog_banner_image":false,"blog_coin":false,"download_the_app":{"button_value":"","button_url":""},"twitter_card":{"twitter_title":"","twitter_description":"","twitter_link":""},"maturity_tag":"Beginner","post_author":[93],"guest_author":false,"hide_toc":false,"select_disclaimer":"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."},"post_mailing_queue_ids":[],"_links":{"self":[{"href":"https:\/\/coinswitch.co\/switch\/wp-json\/wp\/v2\/posts\/31084","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/coinswitch.co\/switch\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/coinswitch.co\/switch\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/coinswitch.co\/switch\/wp-json\/wp\/v2\/users\/93"}],"replies":[{"embeddable":true,"href":"https:\/\/coinswitch.co\/switch\/wp-json\/wp\/v2\/comments?post=31084"}],"version-history":[{"count":5,"href":"https:\/\/coinswitch.co\/switch\/wp-json\/wp\/v2\/posts\/31084\/revisions"}],"predecessor-version":[{"id":36799,"href":"https:\/\/coinswitch.co\/switch\/wp-json\/wp\/v2\/posts\/31084\/revisions\/36799"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/coinswitch.co\/switch\/wp-json\/wp\/v2\/media\/32677"}],"wp:attachment":[{"href":"https:\/\/coinswitch.co\/switch\/wp-json\/wp\/v2\/media?parent=31084"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/coinswitch.co\/switch\/wp-json\/wp\/v2\/categories?post=31084"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/coinswitch.co\/switch\/wp-json\/wp\/v2\/tags?post=31084"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Particulars<\/b>\n CDSL<\/b><\/td> NSDL<\/b><\/td><\/tr> Stock exchange<\/b><\/td> BSE is responsible for CDSL<\/span><\/td> NSE is responsible for NSDL\u2019s dealings <\/span><\/td><\/tr> Promoters<\/b><\/td> CDSL is primarily promoted by BSE<\/span><\/td> NSDL is promoted by IDBI bank, UTI, and NSE<\/span><\/td><\/tr> Demat account format<\/b><\/td> CDSL\u2019s Demat account numbers consist of 16 digits<\/span><\/td> NSDL Demat account numbers begin with \u201cIN\u201d followed by 14 digits<\/span><\/td><\/tr> Number of depository participants registered<\/b><\/td> 599<\/span><\/td> 278<\/span><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n Conclusion<\/h2>\n\n\n\n
FAQs<\/h2>\n\n\n
How can I know the difference between CDSL and NSDL?<\/h3>\n
Who owns the NSDL?<\/h3>\n
Who is owner of CDSL?<\/h3>\n
What is CDSL in simple words?<\/h3>\n
Can I have two Demat accounts?<\/h3>\n
Can I have both NSDL and CDSL accounts?<\/h3>\n
How can I know if my Demat account is CDSL or NSDL?<\/h3>\n
Can I transfer shares from CDSL to NSDL?<\/h3>\n