Depositories in India: NSDL & CDSL
Depository is an institution or a kind of organization which holds securities with it, in which trading is done among shares, debentures, mutual funds, derivatives, F&O and commodities. The intermediaries perform their actions in variety of securities at Depository on behalf of their clients. These intermediaries are known as Depositories Participants. There are two depositories in India. One is the National Securities Depository Limited (NSDL) and the other is the Central Depository Service (India) Limited (CDSL). Every Depository Participant(DP) needs to be registered under this Depository before it begins its operation or trade in the market.
National Securities Depository Limited(NSDL):
National Securities Depository Limited (NSDL) is an Indian central securities depository based in Mumbai. It was established on 8 November 1996 as the first electronic securities depository in India. It went on to establish infrastructure based on international standards that handles most of the securities held and settled in de-materialised form in the Indian capital markets. In August 2009, number of Demat accounts held with NSDL crossed one crore.
NSDL is promoted by Industrial Development Bank of India Limited (IDBI) - the largest development bank of India, Unit Trust of India (now, Administrator of the Specified Undertaking of the Unit Trust of 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.
- Axis Bank Limited
- State Bank of India
- Oriental Bank of Commerce
- Citibank NA
- Standard Chartered Bank
- HDFC Bank Limited
- The Hongkong and Shanghai Banking Corporation Limited
- Deutsche Bank
- Dena Bank
- Canara Bank
Central Depository Services Limited (CDSL)
Central Depository Services Limited (CDSL), is the second Indian central securities depository based in Mumbai. Its main function is the holding securities either in certificated or uncertificated (dematerialized) form, to enable book entry transfer of securities. CDSL is the leading securities depository in India by incremental growth of Beneficial Owner (“BO”) accounts over the last three Fiscals and by the total number of registered Depository Participants (“DPs”), as at the end of Fiscal 2016, according to the CRISIL Report
CDSL went public 2017 and the issue was very succesful.
CDSL is promoted by Bombay Stock Exchange Limited (BSE) jointly with State Bank of India, Bank of India, Bank of Baroda, HDFC Bank, Standard Chartered Bank, Axis Bank and Union Bank of India.